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United Africa Group's bid for Safari Hotel flops

United Africa Group’s bid for Safari Hotel flops

The collapse of the deal comes as a surprise after the Namibian Competition Commission approved the transaction with conditions in July. 
Safari Hotels Chairman, Philip Ellis, told the Windhoek Observer this week that the agreement between the Safari Group and a subsidiary of the UAG Group, United Property Management, had been cancelled and that the proposed sale will not go ahead as planned. 
He refused to say why the deal had collapsed. 
“Safari Hotels (Pty) Ltd will not comment on the reasons,” Ellis said. 
Haddis Tilahun, Founder and Executive Director of the United Africa Group, did not respond to questions emailed to him. 
The UAG through its subsidiary, United Property Management, is the largest hotel group in Namibia with interests in the Windhoek Hilton Hotel and Protea Hotels across the country. 
Its portfolio of hotels includes the Protea Hotel by Marriott Ondangwa, Protea Hotel Marriott Thuringerhof, Protea Hotel Zambezi, Protea Hotel Marriott Pelican Bay, Protea Hotel Marriott Furstenhof, Oshakati Country Hotel, Long Beach Hotel, Sea-View Zum Sperrgebiet, Burning Shore and the Hilton Hotel in Windhoek.
The UAG is also constructing a luxurious Hilton Garden Inn in the heart of Windhoek.  
When completed, the construction of the Inn will cost approximately N$324 million. The hotel will provide at least 180 rooms. 
According to the Namibian Competition Commission documents, the proposed transaction entailed United Property Management acquiring the entire issued share capital in JH Hamman Beherende Beleggings from The GC Hamman Trust (GC Trust), EM Hamman Trust (EM Trust’) and The Pimenta Family Trust (‘PF Trust’).
JH Hamman Beherende Beleggings holds the entire issued share capital in Safari Hotels (Pty) Ltd (Safari Hotel), the operating company that owns and manages the hotel business.
The Safari Hotel comprises of the Safari Court, a 4-star hotel, The Hotel Safari, a 3-star hotel; and The Safari Conference Centre.  
The centre has hosted major conferences in the country including the recently held 38th SADC Heads of States and Government summit.
It also hosts graduation ceremonies of major education institutions such as the University of Namibia, Namibia University of Science and Technology and the International University of Management, among others.    
According to a Government Gazette dated 18 July, the competition commission approved the deal despite reservations that the merged entity would have likely abused its dominance.
To prevent potential anticompetitive effects in the market and to protect employment, the commission said there was to be no retrenchment of employees for two years.
The acquiring entity was also ordered to enter into a management agreement with an independent hotel operator within 12 months of the implementation of the transaction.
It was also supposed to ensure that the Safari Court Hotel was to be operated and controlled by an independent hotel operator for a period of 10 years.

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