Johannesburg – SA Bidco, a new South African entity with no commercial operations and that has never traded before, has been given the green light to buy the local operator of British Airways, Comair.
The Competition Commission said yesterday that it had approved the proposed transaction between the two companies on condition that it would not result in a horizontal overlap because SA Bidco and its controllers did not conduct any activities or services that compete with Comair.
An investigation by the commission revealed that there was no vertical overlap as the merging parties did not participate at different levels of the same supply chain.
It said the proposed transaction was aimed at ensuring the long-term sustainability and viability of Comair, as the company has not been trading since going into business rescue in May.
“Accordingly, the proposed transaction will not result in any market share accretion or any change in the competitive landscape in any relevant market,” the commission said.
In June, Comair warned shareholders that its profits for the year would fall more than 100% only days after the airline filed for voluntary business rescue.
Comair, operator of British Airways in South Africa and low-cost airline kulula.com, said that it expected its earnings a share and headline earnings a share to plummet far below the 192.4% and 197.2c respectively recorded during the corresponding period last year.