Zambia Blocks Local Merger of Toyota-CFAO on Competition Grounds

Zambia’s competition regulator rejected an application from Toyota Tsusho Corp. (8015), the trading arm of Japan’s biggest carmaker, to merge its local operations with those of CFAO SA (CFAO), the auto-part and drug distributor.

The merger would have created a company controlling about 75 percent of Zambia’s new car market, Hanford Chaaba, spokesman for the Competition and Consumer Protection Commission, said by phone from Lusaka, the capital.

“The new motor vehicle market would be highly concentrated,” with a substantial lessening of competition as a result, he said. A phone call to Toyota’s headquarters in Lusaka wasn’t answered outside normal business hours.

Toyota Tsusho owns about 98 percent of CFAO, based in France, after buying the 70 percent of the company it did not already own in a 1.62 billion-euro ($2.15 billion) deal last year. The acquisition, Toyota’s largest since 2005, was part of a plan to expand in Africa.

To contact the reporter on this story: Matthew Hill in Lusaka at mhill58@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net