Johannesburg - Japan’s Kansai Paint is appealing a ruling from South Africa’s competition regulator requiring it to sell a unit to secure approval for its $260m hostile bid for Freeworld Coatings [JSE:FWD].
In approving the deal in April, the Competition Commission attached conditions that included Kansai selling Freeworld’s automotive coatings business, which includes its shareholding in a joint venture with US chemical giant DuPont.
“With respect to the divestiture condition, Kansai’s view is that the basis upon which the Commission imposed this structural remedy was flawed,” the company said on Monday.
“The implementation of the divestiture condition may have a negative impact on the broader business of Freeworld and its wider stakeholders.”
The company said it has applied for an interim relief to halt the process of selling the unit until the outcome of the appeal, which could take up up five months to complete.
In a separate high-profile acquisition, South Africa in May imposed minimal conditions on Walmart in its bid for a 51% stake in the local retailer Massmart [JSE:MSM].
In approving the deal in April, the Competition Commission attached conditions that included Kansai selling Freeworld’s automotive coatings business, which includes its shareholding in a joint venture with US chemical giant DuPont.
“With respect to the divestiture condition, Kansai’s view is that the basis upon which the Commission imposed this structural remedy was flawed,” the company said on Monday.
“The implementation of the divestiture condition may have a negative impact on the broader business of Freeworld and its wider stakeholders.”
The company said it has applied for an interim relief to halt the process of selling the unit until the outcome of the appeal, which could take up up five months to complete.
In a separate high-profile acquisition, South Africa in May imposed minimal conditions on Walmart in its bid for a 51% stake in the local retailer Massmart [JSE:MSM].