The Competition Commission South Africa has rejected the acquisition of WeBuyCars Ltd by MIH eCommerce Holdings Ltd, an entity of the Naspers Group.
MIH eCommerce, an investment holding company, wanted to acquire 60% of WeBuyCars, a dominant wholesaler and online buyer of used cars from the public.
While the Commission ruled out competition following the merge, it found that Naspers Group through Frontier Car Group Inc (FCG) had been anticipating entering the South African market for the wholesale and online buying of used cars in competition with WeBuyCars.
The Commission also noted that that there was a possibility that the merged entity would have the ability to leverage its automotive advertising platforms like OLX and Auto Trader to exclude rivals of WeBuyCars.
MIH eCommerce has investments in OLX and the Naspers’ subsidiary, Car Trader, which operates as AutoTrader.
“The proposed merger would likely result in a substantial lessening of competition through exclusion,” the commission said.
