EABL executives meet Tanzania watchdog over Serengeti buyout
East African Breweries Limited’s Tanzania subsidiary Serengeti Breweries plant in Moshi, Tanzania. PHOTO | FILE
Top managers of beer maker EABL Thursday met Tanzania’s competition watchdog seeking to iron out differences over its 2010 takeover of Serengeti Breweries Limited.
The Fair Competition Commission (FCC) of Tanzania in July issued a notice of intention to withdraw approval of the deal, arguing that The East African Breweries’ (EABL) commitment to ensuring Serengeti grows faster under its control had not been achieved.
The brewer on Tuesday told investment analysts that it expected the buyout conditions would be fulfilled without them being fined or forced to sell all or a part of their 51 per cent stake in the Tanzanian beer maker.
“As there is no wrongdoing by EABL, management does not expect the issue of a fine to come up,” EABL told the analysts, as per an investors briefing released Thursday by Standard Investment Bank following a conference call with the brewer’s management.
“The company expects to resolve the Serengeti post acquisition conditions amicably. Serengeti has actually taken market share from competitors in a rather difficult market and has continued to invest heavily.”
The FCC did not specify the actions it would take against the brewer, but the law gives it power to force an offending acquirer to dispose of some or all of its shares within a set timeframe.
The regulator can also declare an acquisition void, ordering such a transaction to be reversed with the acquirer getting all or part of its cash investment from the investors who had sold the shares.
Since the notice, the commission has held several meetings with EABL in Tanzania.
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