Enforcing the Competition Law in Namibia A Toolkit - cuts ccier

(c) is able to appoint, or to veto the appointment, of a majority of the directorsof the undertaking;(d) is a holding company, and the undertaking is a subsidiary of that companyas contemplated in the Companies Act, 1973 (Act No. 61 of 1973);(e) in the case of the undertaking being a trust, has the ability to control themajority of the votes of the trustees or to appoint the majority of the trusteesor to appoint or change the majority of the beneficiaries of the trust;(f) in the case of the undertaking being a close corporation, owns the majorityof the members’ interest or controls directly or has the right to control themajority of members’ votes in the close corporation; or(g) has the ability to materially influence the policy of the undertaking in amanner comparable to a person who, in ordinary commercial practice,can exercise an element of control referred to in paragraphs (a) to (f).6.2 Varieties of M&AsMergers can be characterised according to three categories: horizontal mergers,which take place between firms that are actual or potential competitorsoccupying similar positions in the chain of production; vertical mergers, whichtake place between firms at different levels in the chain of production (suchas between manufacturers and retailers); and other mergers, such as thosewhich take place between companies that sell the same products in differentmarkets (market-extension mergers), or companies selling different but relatedproducts in the samemarket (productextensionmergers), orconglomerates withdifferent types ofbusinesses.www.images.comMERGERS & ACQUISITIONSAn acquisition may beonly slightly differentfrom a merger. In fact,it may be different inname only. Likemergers, acquisitions are actions through which companies seek economiesof scale, efficiencies and enhanced market visibility. Unlike all mergers, allacquisitions involve one firm purchasing another – there is no exchange ofstock or consolidation as a new company. Two types of acquisitions aredistinguished as follows:• The buyer buys the shares, and therefore control, of the target companybeing purchased. Ownership control of the company in turn conveyseffective control over the assets of the company. 58 The company is acquiredintact as a going business with it all liabilities accrued in the past and allof the risks that company faces in its commercial environment.• When a buyer buys the assets of the target company. The cash the targetcompany receives from the sell-off is paid back to its shareholders bydividend or through liquidation. If the buyer buys out the entire assets,Enforcing the Competition Law in Namibia: A Toolkit 65