An acquisition is a strategic business transaction where a larger company acquires a controlling interest in another company, gaining operational management control and decision-making authority. Acquisitions provide a means to consolidate the market, creating larger entities with expanded reach and enhanced efficiency. They enable companies to pool resources, streamline production processes, and lower expenses, thereby boosting competitiveness. Additionally, larger manufacturing firms often possess identifiable and valuable assets such as factories, equipment, and land, rendering them appealing targets for acquisition activity.

In Zimbabwe, acquisitions fall under the regulatory purview of the Competition and Tariff Commission, established by the Competition Act (Chapter 14:28). Business enterprises who find themselves on an Acquisitions route should understand the following process::

Step 1: Notification of Acquisitions
Before proceeding with an acquisition, companies should assess potential targets to ensure strategic alignment and value creation. Notifiable acquisitions should be above a certain threshold, currently set at USD$1.2 million for the combined annual turnover or asset value. To initiate the process, companies must submit a completed and signed Acquisition Notification Form to the Commission.

Step 2: Regulatory Examination
Business owners must be aware that the Competition Act mandates a thorough examination of acquisitions to assess their impact on competition and public interest, hence the need to prepare accordingly. The substantive test applied is whether the acquisition results in a significant lessening of competition or the creation of a monopoly contrary to public interest. This examination includes stakeholder consultations and economic analyses.

Step 3: Decision and Approval
Upon completion of the examination, the Commission's Acquisition Review Committee evaluates the acquisition proposal and presents its findings to the Main Board for resolution. Acquisitions may be approved with or without conditions, or prohibited altogether. In cases of conditional approvals or prohibitions, the acquiring parties have the opportunity to provide representations to the Commission.

For more information on Acquisition procedures, please reach out to:

Competition and Tariff Commission
23 Broadlands, Emerald Hill, Harare
Email: director@competition.co.zw