The Competition and Fair Trading Commission (CFTC) authorised the acquisition of 62% shares in Churchill International Holding and Kweza International by Michael Mathias, Michael Winn, Richard A J Faulkner, and the African Agriculture Fund (AAF).
At its 38th Board meeting held on 31st January 2014, the Commission heard that the AAF is a private limited company incorporated in Mauritius and it invests in food value chain in Africa with focus in sub-Saharan Africa. It engages in food production and distribution of cereals, livestock farming, dairy, fruit and vegetables, beverages, crop protection, logistics, fertilizers, seed, edible oils, smallholders and agri-services.
The target, Churchill International, is a holding company of Farming Engineering Service registered in Malawi through its 100% shareholding subsidiary, Farming Engineering Services (FES).
FES is involved in engineering and machinery and equipment distribution such as tractors, generators, implements, across a number of franchises. FES also undertakes sales service through workshops, field service and parts stocks.
On the other hand, Kweza International Holdings which is a third party in the transaction, is a holding company and operates in Malawi through Kweza Investment Limited. Its line of business is land ownership and rentals, leased land to Farming Engineering Services, where the latter constructed its premises.
Post-merger Kweza Investment Limited and Farming Engineering Service will be under the control of AAF. The transaction will, therefore, result in vertical relationship of the companies in the relevant market namely land ownership, distribution of equipment and machinery and merchandised agricultural sector.
The Board established that the acquisition will not substantially lessen competition in the relevant market of distribution of machinery and equipment in which FES is engaged. Rather the transaction is bringing in African Agriculture Fund, an investor in agriculture activities. This will bring more economic advantages to Malawi’s economy through technical assistance in mechanised agriculture sector, business expansion, employment, food production and exports, among others.