NOTICE OF INQUIRY INTO THE EFFECT OF THE PROPOSED ACQUISITION OF XM RADIO STATION LIMITED BY ZODIAK RADIO STATION LIMITED

The Competition and Fair Trading Commission (the “Commission”) has received an application for authorization of a proposed acquisition of a Regional Sound Content License of XM Radio Station Limited (hereinafter referred to as “XM Radio” or “the Target Undertaking”) by Zodiak Radio Station Limited (hereinafter referred to as “Zodiak Radio” or “the Acquiring Undertaking”) and together referred to as “the Parties”.

According to the information submitted by the parties, the Acquiring Undertaking, Zodiak Radio, is a limited company, which was incorporated in 2004 under the Companies Act of the Laws of the Republic of Malawi. The Company operates a private radio station focused on providing education, entertainment, and information through customised programs tailored to its listeners countrywide. Currently, Zodiak operates from three main offices located in Lilongwe, Blantyre and Mzuzu.

The Target Undertaking, XM Radio, obtained authorization to provide regional commercial sound content broadcasting services in Malawi with effect from 14^th January, 2022. According to the information made available to the Commission, the company has not been operational until the time of this proposed transaction. The parties have also submitted that the proposed transaction mainly involves the acquisition of the target undertaking’s Regional Sound Content License. As a result, following successful implementation of this transaction, XM Radio will exit the radio broadcasting services market.

In accordance with Section 2(2) of the Competition and Fair Trading Act (CFTA), the proposed transaction constitutes a merger and is, therefore, subject to review by the Commission to establish whether it will likely raise competition concerns in the relevant market. Accordingly, the Commission has embarked on an enquiry to collect information from relevant stakeholders to establish the impact of the transaction on competition in the radio industry and the economy of Malawi.  

In view of the above, the Commission kindly requests radio stations, consumers, other stakeholders in the industry and the general public to provide their information on the proposed transaction.  The Commission will be grateful to receive information on the following, among others:

• The market shares for the players in the radio broadcasting services sector;
• The status of competition in the radio broadcasting services sector;
• The demand for radio broadcasting services in Malawi;
• Barriers to or ease of entry into the radio broadcasting services sector;
• Effect of import competition on the market
• The effect of the transaction on competition in the radio broadcasting services sector;
• Whether the transaction will create a dominant player in the radio broadcasting market;
• Whether the transaction has the effect of substantially lessening competition on the relevant markets
• Whether there is existing or probable countervailing power by competitors and consumers on the market
• Anticompetitive and unfair trading practices by the Parties to the transaction and other players on the market
• Whether the transaction is contrary to public interest or not
• Whether the transaction should be authorized or not authorized  by the Commission

Kindly make your submissions by 1^st March, 2024 to enable the Commission finalise its assessment. Any information submitted after the due date will not be taken into consideration. The submissions should be addressed  to:

You may also call our Public Relations Officer, Innocent Helema, on +265 880 725 075 or our toll-free line 2489.

EXECUTIVE DIRECTOR