Chinese firm acquires Swissport

ABDUEL ELINAZA
 

 

TANZANIA’S Fair Competition Commission (FCC), is investigating reports on the acquisition of Swissport by China’s HNA Group and claims that the merger will not have material effect on the market.

The FCC has given 14 days any parties that have objections with the merger to notify the commission, which strives for fair competition in the country. “FCC is currently investigating if the he intended acquisition in line with the provisions of fair Competition Act and Fair Competition Commission Procedure Rules,” FCC said in a public notice.

The procedure of investigating any merger or acquisition is normal international practice conducted on any company whether local or foreign and is subject to customary regulatory and anti-trust approvals.

In the third quarter of this year HNA Group agreed to acquire the world’s largest ground and air cargo services firm Swissport Group from European PAI Partners for about 2.8 billion US dollars.

Under the deal Swissport will remain as stand-alone business and the FCC investigation is expected to be concluded before the year ends. The Haikou, Hainan province- based conglomerate operates fourth largest airline in China, Hainan Airlines, with fleet size of over 150 aircrafts.

The company said the Swissport Tanzania Chief Executive Officer, Gaudence Temu said the acquisition increases the group financial muscles that would warrant expansion and more business in China.

“If (Swissport group) acquired by financial strong conglomerate you also become a financial strong entity as well,” Mr Temu told ‘Daily News’.

In 2014, HNA Group had revenues in excess of 25 billion US dollars, 72 billion US dollars in assets, 11 listed companies and has more than 110,000 employees worldwide.

The CEO said the deal will also enable the Group to penetrate China’s closed aviation market while increasing the possibility of handling any airline from Asia’s biggest economy. “Yes of course.

The deal will put us in a good position to handle a company from China,” Mr Temu said, Tanzania has great economically potential thus may attract an airline from China. Swissport Tanzania “is performing very well [financially] and receives no subsidies from the Group,” said Mr Temu, who has stirred the largest ground handling company in the country to new highs.

Swissport share went into bullish mode since the start of the year to appreciate by almost 50 per cent in the first ten and half months of this year. The share yesterday went up by 0.54 per cent to close the day at 7,390/- a unit.

In the first half of this year, the number of flights and volume of cargo handled by Swissport Tanzania grew by 9.0 per cent and 3.0 per cent respectively when compared to the same period last year. Hence pushing up profit before tax 43 per cent from 6.96bn/- to 9.93bn/-.

Globally, Swissport is the world’s largest ground and cargo handling company providing ground services for about 224 million passengers and handles 4.1 million tonnes of cargo every year for about 700 companies in the aviation sector.

Under HNA’s ownership, Swissport will continue to expand its global footprint and continue to deliver the highest quality, value added services to existing and future customers. Swissport will remain as a stand-alone business within HNA Group, complementing HNA’s existing activities including aviation, airport management, logistics and tourism