Auto parts giant back from the brink
The Competition Commission has supported the proposed takeover of AutoZone, helping save the company after it entered a business rescue earlier this year.
AutoZone is the largest privately-owned distributor of auto parts, spares and car accessories in SA, with approximately 169 retail stores and seven QSV stores.
BusinessTech reports that it also employs more than 1 400 people. The company entered into business rescue proceedings on 1 July as it could not pay off its debts.
The group underwent a private equity deal in 2014, but its performance did not meet expectations due to the poor performance of the SA economy, which was worsened by the Covid-19 pandemic, civil unrest and a period of stagflation.
However, JSE-listed investment group Metair announced on 4 October that it would acquire AutoZone for R290m.
The Metair Group supplies vehicle components to vehicle manufacturers, vehicle dealerships and automotive aftermarket parts wholesalers.
As of 1 July, the value of AutoZone’s net assets, excluding liabilities that are subject to the business rescue plan was about R485m, including net working capital of R421m.
To address any supply concerns, the Metair Group agreed to conditions that will ensure AutoZone’s competitors continue to receive Metair group’s automotive aftermarket parts post-merger.
‘The merging parties have also agreed to conditions that will ensure the competitively sensitive information of their respective competitors will not be used to dampen competition,’ said the commission.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
