The Competition Regulatory Authority (ARC) announced that it has sanctioned CFAO Motors Mozambique, Lda., for having carried out a merger without prior notification.

In a note made public yesterday and quoted by the newspaper Notícias, ARC says that following this sanction, CFAO Motors will have to pay a fine of 41,115,323.17Mt (forty-one million, one hundred and fifteen thousand, three hundred and twenty-three meticais and seventeen cents).

CFAO is a company engaged in the automotive business in Mozambique. ARC considers that the failure to give prior notice violates the provisions of Article 25(1) of Law No. 10/2013 of 11 April 2013, the Competition Law. It should be noted that this law is based on the fight against anti-competitive practices and the control of mergers of companies.

In the note to which we have had access, ARC clarifies that the concentration operation in question consisted of several simultaneous transactions, under which CFAO acquired 98 percent of the share capital of Auto Avenida, Lda. from the company Companhia de Moçambique, S.A.; and from the company ELOG - Serviços Logística, S.A., an option to buy a property, various office furniture and vehicles.

The list of acquisitions also includes the purchase from Toyota de Moçambique, S.A., currently called Entreposto Serviços Auto Maputo, S.A., of a property, various office furniture and vehicles; from Toyota Auto Maputo, S.A., currently called Entreposto Soluções Auto, S.A., of various office furniture and vehicles.

"Mergers carried out without prior notification to the ARC constitute an infringement punishable by a fine not exceeding 5% of the last year's turnover of each of the undertakings involved or of the aggregate of the undertakings that have engaged in the prohibited conduct, pursuant to Article 29(1) of the Competition Act," notes the ARC.