Saturday, April 20, 2024
BusinessMinistry approves Meta-BGI acquisition amidst monopoly concerns

Ministry approves Meta-BGI acquisition amidst monopoly concerns

The Ministry of Trade and Regional Integration has approved the acquisition of Meta Abo Brewery by BGI Ethiopia.
A letter dated January 1, 2024, and signed by Fiseha Yitagesu, a state minister of Trade, notifies the Ethiopian Investment Commission, the Documents Authentication and Registration Service, and both companies involved in the acquisition that the federal government has signed off on the deal.
Officials at the Trade Ministry have been evaluating the acquisition since receiving the paperwork two months ago, although BGI Ethiopia first announced it had bought out Meta Abo from Diageo in January 2022.
A report from the Ministry reveals concerns of an “oligopoly market structure” in the brewery and distillery industry, as the number of manufacturers drops down to six following BGI’s acquisition.
Nonetheless, the Ministry concluded that all shares, assets, and debts under Meta Abo will be transferred to BGI Ethiopia.
The Ministry has ordered  BGI Ethiopia to avoid trade practices that affect competition in the brewery industry, not to abuse the high market share it now possesses, and to adopt a fair and just distribution mechanism.
BGI Ethiopia is also obliged to maintain Meta Abo’s workforce and employee benefits, as well as the Meta brand and trademark.
The Ministry will routinely inspect whether BGI Ethiopia is adhering to the terms of the agreement, according to the letter.
Documents obtained by The Reporter reveal BGI Ethiopia had eight billion birr in capital registered in Addis Ababa, while Meta Abo has 1.23 billion birr registered in Oromia as of last year.
Oligopoly concerns aside, the transaction details of BGI’s latest acquisition have raised eyebrows.
Reports and documents reveal that BGI Ethiopia paid no more than 64 birr (or one euro at current exchange rates) to acquire Meta Abo from Diageo, which acquired the brewery from the Ethiopian government for more than USD 220 million in 2012.
 

 

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