Tanzania may cancel EABL, Serengeti deal

DAR ES SALAAM: Tanzania authorities have invited submissions from interested parties who feel that its decision to revoke the East African Breweries Ltd (EABL)-Serengeti merger could hurt their own interests.

In a public notice appearing in local dailies yesterday, the Fair Competition Commission of Tanzania says those affected can also request for an opportunity to submit their arguments in a formal oral hearing.

“It was observed that, based on the rationale for approval, the performance by Serengeti was not as per expectations of the Commission. The Commission subsequently made a finding that EABL was in breach of rules,” said a notice signed by the Commission Director General.

The agency, equivalent of the Competition Authority of Kenya, accuses EABL of contravening the terms of the approval that was granted in 2010. Among the conditions set in the approval was that the acquisition would help Serengeti move its brands faster and gain market share – a reality that may not have been achieved.

East African Breweries acquired the stake in Serengeti after selling a stake it held in Tanzania Breweries, which is owned by its global rival and beverage manufacturer SABMiller. But it is SABMiller that has gained from the termination of the agreement between the two brewers.