The Fair Trading Commission (FTC) has given the green light to the Goddard Enterprises Limited-owned GCG for takeover of Seawell Air Services, previously owned by the Massy Group.
Moreover, the Barbados regulators have attached no conditions to the approval, determining that competition in the market would not be harmed by the development.
The local regulator of competition and consumer rights, said that “based on the evidence presented, the Commission has determined that the proposed transaction does not create competitive concerns.”
Moreover, in the FTC’s 11-page ruling, it concluded too that “. . . since the merger does not cause a change in concentration levels —which does not create or strengthen the market position of GCG —the proposed transaction will not significantly impede competition.”
In May last year GCG and Seawell Air Services applied to the FTC for approval of the acquisition which was believed to have concentrated greater market power in ground handling and related services in the hands of the GEL group.
Seawell Air Services (SAS) and GCG both operated at the Grantley Adams International Airport (GAIA).
After SAS terminated its services at the GAIA and severed its employees in October 2019, GCG began operations in November 2019, establishing a temporary agreement to operate in the markets that SAS exited.
Goddard Enterprises also operates at GAIA through its subsidiary GCG Catering which services commercial and private airlines.
As such, the FTC said that by definition, the acquisition of SAS by GCG was considered a subsidiary merger — a form of “horizontal concentration as the applicants are potential competitors”.
In their application for approval of the purchase of SAS, it was disclosed: “The decision to exit the ground handling business was made due to the airport ground handling businesses in Barbados and Antigua performing below expectation.
“This led to GCG’s agreement to purchase the assets of SAS, including its park-and-fly business.
GCG believes that the acquisition would assist in enhancing its regional presence for ground handling services.
“After reviewing the application, the FTC in its ruling, determined under the Fair Competition Act: “That the result of the acquisition by GCG Ground of the assets of Seawell Air Services, does not lessen competition in the market for ground handling, park-and-fly and automotive care services in Barbados, and accordingly approves the transaction without condition under Section 20 of the Act.”
The FTC disclosed that GCG Ground Services (Barbados) Limited is wholly owned by GCG Ground Services (St Lucia) Limited, an international business company incorporated under the laws of St Lucia.
GCG Ground Services (St. Lucia) Limited is in turn owned by Infinite Holdings (St. Lucia) Limited, a company also incorporated in St Lucia in which GEL holds 51 per cent interest.
The sole purpose of the incorporation was for the takeover of the operations of SAS when it (SAS) ceased operations at the Grantley Adams International Airport.
The cessation was in October 2019. GCG began operating at the airport in November 2019 through a temporary agreement with SAS while awaiting approval from the FTC. (IMC1)