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The Council of the ECOWAS Regional Competition Authority,
MINDFUL of Supplementary Act A/SA.1/12/08 adopting of Community Competition
Rules and the modalities of their application within ECOWAS;
MINDFUL of Supplementary Act A/SA.2/12/08 on the establishment, functions and
operation of the ECOWAS Regional Competition Authority;
MINDFUL of Supplementary Act A/SA.3/12/21 amending Supplementary Act
A/SA.2/12/08 on the establishment, powers and functioning of the ECOWAS Regional
Competition Authority;
MINDFUL of Regulation C/REG.21/12/21 on the powers and composition of the
Council of the ECOWAS Regional Competition Authority;
MINDFUL of Regulation C/REG.23/12/21 on the rules of procedure for mergers and
acquisitions in ECOWAS;
MINDFUL of Regulation C/REG.24/12/21 on the ERCA’s rules of procedure in
competition matters;
MINDFUL of Enabling Rule PC/REX.1/01/24 on the Procedural Manuals of the
ECOWAS Regional Competition Authority relating to its Council, in its Article 12 (3.d);
MINDFUL of the notification letter from EDF International dated 25 February 2025 and
the supporting documents registered under number 1026;
HAVING HEARD the Secretary of the Council during its session of 16 April 2025 on
the facts, the procedures and the findings of the proposed transaction evaluation;
CONSIDERING THE FOLLOWING:
I. FACTS AND PROCEDURES
I.1 Notification
1. The ECOWAS Regional Competition Authority (ERCA) was referred to by CASTEL
GROUP, by letter dated 25 February 2025. The letter and supporting documents
were filed under reference number 1026.
2. In accordance with Article 2 (1.d) of Regulation C/REG.23/12/21 and subsequent
texts, the notification concerning the acquisition transaction was published in the
Official Journal of the Community (Volume 2, March 2025), on the ERCA and
ECOWAS Commission websites, and in the concerned Member States (11 March
2025).
I.2 The Acquisition Transaction
3. The transaction currently based Share Purchase Agreement signed on 28 January
2025, under which D.F. Holding (CASTEL Group) would take exclusive control of
Guinness Ghana Breweries PLC.
4. It mainly concerns two parties:
– CASTEL, the Acquirer;
– GUINNESS GHANA BREWERIES Ltd, the Target, a subsidiary of Diageo
Holdings Netherlands BV, mainly active in Ghana and to a lesser extent in
Liberia, in the beverages sector.
5. Before the transaction, Guinness Ghana Breweries Ltd is 80.41% owned by Diageo
Holdings Netherlands BV, the seller.
6. The transaction involves acquiring 80.41% of shares held by Diageo Holdings
Netherlands BV in Guinness Ghana Breweries Ltd by CASTEL Group, with a
possibility to increase this to 100% if the mandatory public offer, as required by
Ghana Stock Exchange regulations, is effectively launched.
II. ANALYSIS OF THE TRANSACTION’S MARKET IMPACT
II.1 Overview
7. This acquisition will allow CASTEL to enter the Ghanaian market and better
structure the activities of Guinness Ghana Breweries Ltd in both alcoholic and nonalcoholic beverages through production (bottling), sales and distribution of products
such as beer, spirits, malt beverages, and other soft drinks. These activities may
extend to other ECOWAS Member States.
8. Available data shows that the alcoholic and non-alcoholic beverage market is
rapidly growing, driven by strong and rising consumer demand.
9. Based on available industry data, Guinness Ghana Breweries Ltd is one of the
main players in the Ghanaian market. It ranks second in terms of market share
after Accra Brewery Plc. Its production and sales cover products like malt
beverages, ready-to-drink beverages, vodka, whisky, rum, etc.
10.The CASTEL Group is present in Ghana through very limited sales of imported malt
beverages and wine.
II.2 Definition of the Relevant Market
a. Product Market Delimitation
13.The relevant market for the transaction is that of alcoholic and non-alcoholic
beverages through production (bottling), sales and distribution of products such as
beer, spirits, malt beverages, and other soft drinks within the ECOWAS common
market. Actors like Guinness Ghana Breweries Ltd and CASTEL Group offer
different but substitutable products in this space.
b. Geographical Delimitation
14.The competition analysis focuses on the Ghanaian market, where demand for
beverages is moderately concentrated. However, the acquirer’s presence in other
ECOWAS Member States and the target’s ability to freely access the common
market support the possibility of expanding the target company’s production and
distribution activities via a regional network.
II.3 Conclusion
II.3.1 Legal Analysis
a. Applicable Legal Framework
15.The prevailing legal framework for monitoring business mergers and acquisitions
in the ECOWAS region is based on two key instruments:
– Supplementary Act A/SA.1/12/08 of 19 December 2008 on Community
competition rules;
– Regulation C/REG.23/12/21 of 10 December 2021 on mergers and acquisitions
within ECOWAS.
16.Moreover, the evaluation adheres to the procedures laid out in the Implementing
Regulation PC/REX.1/01/24 (ERCA’s Procedures Manual) and the Guidelines on
mergers and acquisitions.
17.According to these provisions, ERCA is competent to examine any merger or
acquisition that:
– is likely to have anti-competitive effects in one or more Member States;
– may affect trade or investment among ECOWAS Member States;
– involves businesses operating in multiple countries within the common market.
18.These legal texts aim to prevent any merger or acquisition from distorting,
restricting, or harming competition within the common market or hindering intracommunity trade.
b. Admissibility Conditions of the Notification
19.The notification submitted by the parties was assessed according to the legal
criteria in place. The following conditions were verified:
– The concerned companies (CASTEL Group and Guinness Ghana Breweries
Ltd) operate in at least two ECOWAS Member States;
– Their combined turnover within the common market exceeds 20 million Units of
Account (UA);
20.These conditions been met, justified ERCA’s review of the transaction.
II.3.2 Competition Situation
21.The transaction does not raise major concerns in terms of competition, given the
current structure of the relevant markets.
22.Indeed, the proposed acquisition is not expected to cause any significant horizontal
or vertical overlaps, apart from a negligible overlap in malt beverage supply, with
an insignificant market share increase (less than 0.001%).
23.Therefore, any negative impact of the transaction on competition and consumer
interest appears very limited, at least in the short term.
24.Consequently, the Council endorses the evaluation conducted by ERCA’s
Executive Directorate, which demonstrates that the transaction is not likely, on the
one hand, to harm competition and, on the other hand, to negatively affect
consumer welfare in the relevant products and geographic markets.
DECIDES
Article 1: Approval
The acquisition of Guinness Ghana Breweries Plc by CASTEL Group is approved
unconditionally.
Article 2: Integration into the Regional Market Dynamics
CASTEL Group is invited to align with regional market dynamics and tailor its offerings
to meet the specific needs of consumers in ECOWAS Member States.
Article 3: Post-Transaction Monitoring
The ERCA Executive Directorate shall conduct post-transaction monitoring to ensure
that CASTEL Group’s commercial strategy implementation remains consistent with
free market competition principles in the region.
Article 4: Entry into Force, Notification and Publication
This Decision, which takes effect from the date of its signature, shall be notified to the
parties and published in the Official Journal of the Community.
Done in Abuja, this day of 17 April 2025
FOR THE COUNCIL OF ERCA
Mr. Adama DIOMANDE
For: THE CHAIRPERSON