Construction federation challenges Ohorongo-Cheetah cement merger

The Namibian cement industry is at a critical juncture following Industries, Mines and Energy Minister Modestus Amutse’s decision to approve the merger between Ohorongo Cement (owned by Schwenk Namibia) and Cheetah Cement (owned by Whale Rock), overturning an earlier prohibition by the Namibia Competition Commission (NaCC). This move, published in Government Gazette notice No. 229 of 2026, has sparked a strong challenge from the Construction Industries Federation of Namibia (CIF). The CIF warns that the merger, which would consolidate the country's two main cement producers, threatens competition, could lead to price increases, and negatively impact local contractors and small and medium enterprises (SMEs), despite the Minister's imposed conditions aimed at safeguarding employment and local ownership.

Namibia's competition landscape is currently grappling with a significant development in its vital construction sector. Earlier this month, the Minister of Industries, Mines and Energy, Modestus Amutse, made a pivotal decision to approve the merger between Ohorongo Cement and Cheetah Cement, effectively overturning the Namibia Competition Commission's (NaCC) initial ruling that had blocked the transaction. This ministerial intervention, published in Government Gazette notice No. 229 of 2026, has ignited a fierce debate, particularly from the Construction Industries Federation of Namibia (CIF), which views the approval as a grave threat to fair competition and the sustainability of local businesses.

The proposed merger involves Whale Rock, the owner of Cheetah Cement, acquiring all shares of Schwenk Namibia, which controls Ohorongo Cement. If concluded, this transaction would unite Namibia's only two cement producers under a single entity, raising substantial concerns about market concentration and potential monopolistic practices. The NaCC had previously prohibited the merger, citing fears of reduced competition and adverse effects on employment. However, the Minister's decision, while imposing certain conditions, has paved the way for the consolidation, prompting the CIF to call for its immediate withdrawal and a comprehensive re-evaluation.

This article delves into the legal intricacies surrounding the Ohorongo-Cheetah cement merger, examining the interplay between the NaCC's mandate, the Minister's review powers under the Competition Act, 2003, and the broader public interest considerations. It will analyze the arguments put forth by the CIF and the implications of this decision for competition law enforcement and the Namibian economy, highlighting the delicate balance between promoting economic efficiency and safeguarding market fairness.

The legal framework governing mergers and acquisitions in Namibia is primarily enshrined in the Competition Act, 2003 (Act No. 2 of 2003). This Act establishes the Namibia Competition Commission (NaCC) as the independent body responsible for promoting and safeguarding competition in the Namibian economy. Chapter 4 of the Act specifically deals with mergers, defining them as instances where one or more undertakings directly or indirectly acquire control over another. Undertakings proposing a merger that meets prescribed thresholds are required to notify the NaCC, which then investigates the likely effects of the transaction.

The NaCC's assessment of a merger extends beyond mere market structure to include crucial public interest grounds. These considerations, outlined in Section 47(2) of the Act, encompass the impact on a particular industrial sector or region, employment, the ability of small businesses or historically disadvantaged persons to become competitive, and the capacity of national industries to compete internationally. In the case of the Ohorongo-Cheetah cement merger, Whale Rock Cement, the owner of Cheetah Cement, applied to acquire the entire issued share capital of Schwenk Namibia, which holds a majority stake in Ohorongo Cement, in February 2025. The NaCC, after its investigation, prohibited the merger in July 2025, expressing concerns that it would lead to an effective monopoly in the domestic cement market, substantially lessen competition, and potentially result in job losses.

However, the Competition Act also provides for a ministerial review of the NaCC's decisions. Section 49 of the Act grants the Minister of Industries, Mines and Energy the power to review a decision of the Commission, including the power to confirm, vary, or set aside the decision. This provision allows for a broader consideration of public interest factors that may extend beyond the purely competition-focused assessment of the NaCC. It was under this statutory mandate that Minister Modestus Amutse overturned the NaCC's prohibition, allowing the merger to proceed subject to specific conditions.

The NaCC's initial prohibition of the Ohorongo-Cheetah cement merger was rooted in a rigorous competition assessment. The Commission found that the proposed acquisition, which would consolidate the country's two primary cement producers, would result in an effective monopoly, significantly lessening competition in the Namibian cement market. Concerns were also raised regarding the potential for coordinated behaviour, the strengthening of a dominant position, and the absence of sufficient benefits to outweigh these anti-competitive effects. The NaCC's decision aligned with its mandate to prevent market concentration that could harm consumers and other market participants.

Minister Amutse's subsequent decision to overturn the NaCC's ruling, as published in Government Gazette notice No. 229 of 2026, was made under his review powers in terms of Section 49(3) and (4)(a)(i) of the Competition Act. The Minister's determination acknowledged the NaCC's concerns but concluded that these could be adequately addressed through the imposition of specific conditions rather than an outright prohibition. These conditions include a directive that no jobs be lost as a result of the merger, that the Cheetah Cement plant must remain operational with options explored for its continued productivity, and that the merged entity must increase local ownership to at least 40%. Furthermore, the NaCC was instructed to monitor the company to prevent any abuse of a dominant market position.

The Construction Industries Federation of Namibia (CIF) has vehemently challenged the Minister's approval, arguing that the imposed conditions are insufficient to mitigate the substantial risks posed by the merger. CIF chief executive Bärbel Kirchner highlighted critical omissions in the conditions, such as the lack of provisions for cement price monitoring, ensuring fair market access, protecting against discriminatory pricing, safeguarding SMEs, mandating local procurement, promoting import competition, and establishing clear reporting requirements and penalties for non-compliance. The federation contends that relying solely on post-merger monitoring is inadequate and that the damage to competition could be irreversible. Their stance underscores a fundamental tension between the NaCC's expert competition analysis and the Minister's broader public interest mandate, particularly when public interest considerations are interpreted to favour the survival of an industry or job retention, even at the expense of market competition. The NaCC itself has indicated that the Minister acted within his legal mandate, even though their initial decision was reversed.

This case also brings to the fore the potential for judicial review of ministerial decisions under the Competition Act. While the Act grants the Minister review powers, such decisions are not immune from legal challenge, especially if they are perceived to be irrational, procedurally unfair, or to have misapplied the law. The CIF's commitment to pursuing "all lawful avenues available" suggests that the matter may yet proceed to the High Court, which would provide an opportunity for a judicial interpretation of the scope and limits of ministerial intervention in competition matters, particularly concerning the balance between competition principles and public interest factors. This situation mirrors, in some respects, the robust public interest considerations seen in other African competition regimes, such as South Africa, where socio-economic factors often play a significant role in merger assessments.

The Ohorongo-Cheetah cement merger represents a pivotal moment for competition law and economic policy in Namibia. The Minister's decision to override the NaCC's prohibition, while imposing conditions, sets a significant precedent regarding the interpretation and application of public interest considerations within the Competition Act, 2003. The vigorous challenge mounted by the Construction Industries Federation of Namibia highlights the deep-seated concerns within the industry about the potential for monopolistic practices, price manipulation, and adverse effects on local businesses and the broader construction value chain.

For legal practitioners, this case underscores the complex interplay between competition principles, socio-economic objectives, and governmental oversight in merger control. Advising clients on merger transactions in Namibia now requires a comprehensive understanding not only of the NaCC's rigorous competition assessment but also of the potential for ministerial intervention based on broader public interest grounds. Practitioners must be prepared to navigate situations where the Minister's interpretation of public interest may diverge from the Commission's competition-focused findings. The ongoing developments, including any potential judicial review initiated by the CIF, will be crucial in clarifying the boundaries of ministerial power and the enforceability of conditions attached to merger approvals. It is imperative for legal professionals to closely monitor these developments to effectively guide clients through Namibia's evolving competition law landscape.