The Competition Commission of South Africa has recommended that the proposed acquisition of WeBuyCars by Naspers be prohibited, on the basis that it could stop a similar business from entering the market and dominate any competitors.
The proposed deal would see MIH eCommerce Holdings, an entity within the Naspers group, acquiring 60% of WeBuyCars.
MIH eCommerce is mainly an investment holding company and does not itself supply any products or services in South Africa. It has investments in OLX and the Naspers’ subsidiary, Car Trader, which operates as AutoTrader.
Although the commission found that the proposed transaction does not present any competitor (horizontal) overlap in South Africa, it was found that the Naspers Group, through Frontier Car Group, has been anticipating entering the South African market for the wholesale and online buying of used cars in competition with WeBuyCars.
“These entry plans were thwarted directly as a result of the merger,” the commission said.