The Competition Tribunal of South Africa has given the green light to Harith, a Pan-African investor and infrastructure developer, to acquire FlySafair, the country's largest airline by market share, in a deal worth approximately R7bn. The approval comes with conditions aimed at ensuring fair competition in the aviation sector. This significant transaction is expected to be finalized before the end of the year. Harith's acquisition of FlySafair marks one of its largest investments in its 20-year history.
The conditions set by the tribunal include restrictions on the appointment of common directors to the boards of Lanseria International Airport and FlySafair as long as Harith holds a stake in both entities. Additionally, Harith will not participate in decisions regarding pricing, slot allocation, and airport infrastructure at Lanseria that could impact other airlines. The merger parties have also agreed not to retrench any employees due to the merger for a period of three years. These conditions are designed to prevent anti-competitive behavior and protect the interests of other airlines and employees.
For Harith, this deal represents a strategic move to expand its presence in the aviation sector and support the growth of FlySafair. The company's CEO, Sipho Makhubela, emphasized that the investment goes beyond a simple financial transaction, highlighting the importance of long-term South African capital backing a successful local business. Makhubela noted that FlySafair has built a trusted brand with a strong management team and a market-leading customer proposition, and Harith aims to support this success with patient capital while enabling the next phase of growth.
The acquisition is part of Harith's broader strategy to transition from owning assets to owning the connectivity between them. The company has a diversified transport portfolio, including stakes in Lanseria International Airport and Traxtion, Africa's largest private rail operator. Harith also has a significant investment in the redevelopment of the Beitbridge Border Post, Southern Africa's busiest crossing point. The deal will see FlySafair join Harith's portfolio, further solidifying its position in the transportation sector.
FlySafair, which owns about 60% market share in South Africa, is poised for further growth under Harith's ownership. The airline's CEO, Elmar Conradie, expressed excitement about the road ahead with the new shareholder and the opportunities to strengthen the airline's foundations and grow the South African passenger aviation market. Conradie emphasized that business operations will continue as usual for customers and employees as the remaining conditions are met.
The Competition Commission had recommended the approval of the deal with conditions in July, citing concerns about Harith's interest in Lanseria International Airport. The commission required that there be no collusive and competitive conduct regarding Harith's investment in Lanseria. To address these concerns, the merger parties agreed to implement measures such as information exchange and ensuring that airport-related goods or services provided to other airlines are not offered on unfair terms.
The acquisition of FlySafair by Harith is expected to have a significant impact on the South African aviation sector, with the potential to drive growth and increase connectivity. With a 37% stake in Lanseria International Airport, Harith's investment in FlySafair is seen as a strategic move to capitalize on the growing demand for air travel in Africa. The deal is also expected to create new opportunities for tourism and trade, contributing to broader economic growth in the region.
Key points
- The Competition Tribunal has approved Harith's R7bn acquisition of FlySafair with conditions aimed at ensuring fair competition.
- Harith's acquisition of FlySafair marks one of its largest investments in its 20-year history, with plans to support the airline's growth and expansion.
- The deal is expected to have a significant impact on the South African aviation sector, driving growth and increasing connectivity.
