The High Court of Namibia has ruled against the proposed merger between Whale Rock Cement, owner of the Cheetah Cement brand, and Ohorongo Cement. The court's decision comes after Industries, Mines and Energy Minister Modestus Amutse admitted to an administrative error that prevented him from considering objections to the merger. In June, Amutse had approved the merger with new conditions, despite the Namibian Competition Commission's prohibition of the deal last year due to concerns over job losses and market monopoly.
The Namibian Competition Commission had initially prohibited the merger, citing concerns that it would lead to job losses and create a monopoly in the cement market. Whale Rock Cement had appealed this decision to the then-industries minister, Natangwe Ithete, who did not respond. When Amutse took up the appeal this year, he decided to approve the merger, stating that he had received no objections. However, this claim was later found to be an administrative mistake, as objections from interested parties, including iTE Products, a South African customer of Ohorongo, were indeed submitted to the ministry.
iTE Products had submitted detailed objections to the ministry on March 25, 2026, but these were not brought to Amutse's attention. The company subsequently brought a court case against Amutse in September for failing to consider their objections. In an affidavit filed at the High Court, Amutse admitted that the objections were not placed before him for consideration before he made the determination. He acknowledged that he should have considered all the information, including employment and financial consequences, before deciding on the merger.
Amutse's affidavit revealed that his primary concern was the potential harm that could result if the merger was not approved, including job losses and financial consequences. He considered the potential for job losses and the effect on employees and their families, as well as potential financial losses and wider economic consequences. However, the minister's failure to consider all affected parties' views led to a violation of procedural fairness, rendering his decision unlawful.
The High Court ruled that Amutse's decision to allow the merger was "unlawful, invalid and of no force and effect." As a result, the competition watchdog's prohibition on the merger remains in effect. Lawyer for iTE Products, Nick Korb of Cronjé Inc law firm, welcomed the court's decision, stating that it affirms the institutions established to protect competition in Namibia work and that their decisions can only be set aside in accordance with the law.
The proposed merger had significant implications for the Namibian cement market, with Cheetah Cement having begun consultations to retrench its workers before the minister's decision. The court's ruling ensures that the merger control framework under the Competition Act is applied lawfully, protecting competition and the interests of all stakeholders. The decision is seen as a positive development for Namibia, with Korb describing it as "a good day for Namibia."
The court's decision highlights the importance of procedural fairness in administrative decision-making. The case demonstrates that even in complex and sensitive matters, such as mergers and acquisitions, the law must be applied fairly and transparently. The ruling serves as a reminder to government officials and businesses alike of the need to adhere to the principles of fairness and transparency in their decision-making processes.
Key points
- The High Court of Namibia overturned the industries minister's decision to allow a merger between Whale Rock Cement and Ohorongo Cement due to an administrative error.
- The Namibian Competition Commission had initially prohibited the merger due to concerns over job losses and market monopoly.
- The court's decision ensures that the merger control framework under the Competition Act is applied lawfully, protecting competition and the interests of all stakeholders.
