FTC okays PanJam-JP merger
Jamaica’s competition watchdog, the Fair Trading Commission, FTC, has given the pending merger of the operations of Jamaica Producers Group with PanJam Investment Limited.
It paves the way for the businesses to start doing business formally under the new name of Pan Jamaica Group Limited during the second quarter of this year.
“The parties expect to have the legal aspects of the asset transfers completed this month and expect the businesses to come together operationally early in the second quarter,” said Managing Director of Jamaica Producers, Jeffrey Hall.
Under the deal, Jamaica Producers will transfer its assets to Pan Jamaica and take a 34.5 per cent stake in the new company in return. The JP assets are currently being held in a new entity called JP Global, which is being utilised to effect the transfer.
The merged entity will create a group with more than $110 billion in assets, about half of which are expected to be in the form of cash and investments.
The new Pan Jamaica Group will be chaired by Stephen Facey. Hall will become vice-chairman and CEO, and the current CEO of PanJam, Joanna Banks, will hold the title of president.
Within two years, however, Facey is expected to give up the role of chairman to Hall, and Banks will step into the CEO position.
“We asked our lawyers to cooperate fulsomely with the information requests of the FTC. We are satisfied with their overall conclusion on the matter,” said Hall in the wake of the FTC decision.
The executives expect the amalgamation to close this month. Later in the year, all the shares in JP Global will be transferred to PanJam, and PanJam will issue an equal number of shares to Jamaica Producers Group equivalent to 34.5 per cent interest in Pan Jamaica Group.
The FTC examined whether the merger would affect competition.
“A key objective of reviewing a proposed merger is to assess the importance of competition, which may be lost if the merger was consummated,” said the FTC in the report that was dated January 24 but published a month later on February 28.
The FTC stated that while both entities are vast in scope, their products and services do not overlap in any market. Additionally, the agreement does not have any intent, or effect to substantially lessen competition in any market, the competition regulator said.
“The conclusion of the investigation is that the amalgamation agreement between JP and PanJam does not contain provisions that are likely to breach the FCA,” the commission noted, with reference to the Fair Competition Act.
On that basis, the agency issued a ‘statement of non-objection’, allowing the deal to be consummated.
PanJam subsidiaries include an investment company; nine property development, management, and rental companies; two hotel management companies; and one food manufacture and distribution company. Additionally, the property and investment holding conglomerate has shares in two financial service providers and a hotel management company.
Jamaica Producers, a diverse food and logistics conglomerate, with holding spanning the Caribbean and parts of Europe, operates 17 subsidiaries and associated companies. Its businesses span shipping and logistics, food manufacture and distribution, and infrastructure financing.
Jamaica Producers will continue to operate as a separate entity, post-merger, as an investment holding company. It will also remain listed on the stock market and will the renamed Pan Jamaica Group.