Majestic, Frabelle told to get merger approval

The Independent Consumer and Competition Commission (ICCC) became aware of the proposed merger between Majestic Food Corporation Ltd and Frabelle (PNG) Ltd through a report in The National on May 14.
As part of its competition role, the commission has informed the parties to this proposed transaction that Section 69 of the Independent Consumer and Competition Commission Act 2002 prohibits business mergers or acquisitions that would have, or would be likely to have, the effect of substantially lessening competition in a market in Papua New Guinea.
However, Section 81 of the ICCC Act allows for the parties to seek clearance from the ICCC.
Alternatively, Section 82 of the ICCC Act allows the ICCC to grant authorisation to parties should the ICCC form a view that the proposed transaction would result in net public benefits despite its likely harm to competition.
A clearance or authorisation from the ICCC safeguards the transaction from being challenged for potential breach of Section 69 of the ICCC Act by aggrieved third parties.
ICCC commissioner and chief executive Paulus Ain said although notifications for clearance and authorisation were currently voluntary, “the ICCC can investigate any business acquisitions in any markets in PNG should it form a view that the business transaction may have harmful implications to competition”.
“It is therefore prudent that the parties seek either a clearance or an authorisation from the ICCC to protect this proposed transaction from future investigation and potential litigation action under the ICCC Act,” he said.
“In view of the above, the parties are requested, as responsible corporate citizens, to formally seek clearance under Section 81 of the ICCC Act.
“If a valid clearance application is submitted, the ICCC will review and give a decision within 20 days after the date of receiving and registering the application.”