Policy uncertainty, mergers, and acquisitions in the South African business environment

Abstract

This study examines policy uncertainty on mergers and acquisitions (M&A) in South Africa, emphasising the extensive regulatory review by the Competition Commission under the 'public interest consideration' criterion. It aims to identify the cost implications and uncertainties associated with M&A transactions to propose measures to reduce these uncertainties. Utilising qualitative methodologies, the study gathers empirical evidence through interviews with companies and competition lawyers involved in the M&A processes. The findings reveal significant concerns about economic uncertainty, merger control, and policy and regulation impacting investment decisions. Policy uncertainty, particularly in the context of merger regulation, imposes substantial cost implications and delays on M&A activities, negatively affecting investment, growth, and economic development. It emphasises the necessity for a regulatory framework that minimises disruptions and costs to business participants. The findings suggest that addressing policy uncertainty and streamlining regulatory processes are crucial steps towards enhancing South Africa's attractiveness as an investment destination and fostering economic growth and development.