Subscribe

Jasco gives up on Cross Fire acquisition

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 03 Aug 2017
Jasco will no longer acquire 65.4% of Cross Fire for R52.3 million.
Jasco will no longer acquire 65.4% of Cross Fire for R52.3 million.

Jasco Electronics Holdings has terminated a planned acquisition of Cross Fire Management after the competition authorities ruled against the merger last month.

Jasco had planned to acquire 65.4% of Cross Fire for R52.3 million but on 3 July, the Competition Commission (CompCom) prohibited the proposed merger, saying it would likely "substantially prevent or lessen competition in the provision of active fire protection systems", particularly in the Western Cape and Gauteng regions.

"Jasco still does not share this view held by the Competition Commission," the company said in a statement.

However, "after careful deliberation, both Cross Fire and the group decided not to appeal the decision by referring it to the Competition Tribunal for reconsideration".

The CompCom said last month it believed the merger would result in a reduction of the number of firms in markets that are already highly concentrated. It believed this would "make it easier to perpetuate existing cartel conduct of price fixing, market allocation and collusive tendering".

Jasco Electronics provides converged ICT offerings for carriers and enterprises across various sectors and its subsidiary, Jasco Fire, is active in the fire protection industry. Jasco Fire provides a turnkey solution to customers by designing, supplying and installing a full fire protection system as well as manufacturing the pipes used in fire protection systems.

Cross Fire provides the design, supply, fabrication, installation, servicing and maintenance of a range of fire protection systems. It does not manufacture pipes used in fire protection systems but sources the supply of pipes and installation services from third parties. It offers a turnkey solution to customers although it outsources the fabrication and installation elements.

The CompCom said it was concerned the merger would result in the removal of a potential disruptor in the market, Jasco Fire, which has not been implicated in cartel conduct.

Share