The decision by the Competition Commission last week to block the sale of Burger King by Grand Parade Investments is incomprehensible. It has severely damaged SA’s reputation as an attractive destination for foreign investment; it has damaged the ability of black-owned firms to realise their investments; and it has harmed the advancement of BEE broadly by introducing a new and unexpected cost for firms that have high levels of black ownership.

The facts are these: Grand Parade Investments, a 69% black-owned JSE-listed firm that was founded with R28m raised from 10,000 historically disadvantaged South Africans, wants to sell Burger King (SA) to Emerging Capital Partners (ECP), a private equity firm. ECP is an Africa-focused firm with investments across the continent, headquartered in the US. The commission blocked the deal because it “would lead to a significant reduction in the shareholding of historically disadvantaged persons in the target firm, from more than 68% to 0% as a...

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