NAMIBIA Law and Practice Contributed by: James Smith and Daneale Beukes, Engling, Stritter & Partners
assets of the undertaking, that as a result of a trans - action: • (a) would become controlled by another undertak - ing; and • (b) any other undertaking that is controlled by, or the direct or indirect control over the whole or part of its business is held by, an undertaking referred to in paragraph (a). The Thresholds Determination, at the Annexure, Sec - tion 2, provides that the asset value of an undertak - ing at any time is based on the gross value of the undertaking’s assets as recorded on the undertaking’s balance sheet for the end of the immediately previous financial year. If, between the date of the financial statements being used to calculate the asset value of an undertaking and the date on which that calculation is being made, the undertaking has acquired any subsidiary under - taking, associated undertaking or joint venture not shown on those financial statements, or divested itself of any subsidiary undertaking, associated undertaking or joint venture shown on those financial statements, then: • the following items must be added to the calcula - tion of the undertaking’s asset value if these items must in terms of GAAP or IFRS be included in the undertaking’s asset value: (a) the value of assets recently acquired; and (b) any assets received in exchange for recently divested assets; and • the following items may be deducted in calculating the undertaking’s asset value if these items were included in the undertaking’s asset value: (a) the value of recently divested assets at the date of their divestiture; and (b) the value of any asset that has been shown on the balance sheet and has been subsequently used to acquire the recently acquired asset. In respect of the calculation of annual turnover, Section 3 of the Annexure provides that the annual turnover of an undertaking at any time is the gross revenue of that undertaking from income in, into or from Namibia, arising from the following transactions and events as
recorded on the undertaking’s income statement for the immediately previous financial year: • the sale of goods; • the rendering of services; and • the use by others of the undertaking’s assets yield - ing interest, royalties and dividends. If, between the date of the most recent financial state - ments being used and the date on which the calcula - tion is made, the undertaking has acquired any sub - sidiary undertaking, associated undertaking or joint venture not shown on those financial statements or divested itself of any subsidiary undertaking, asso - ciated undertaking or joint venture shown on those financial statements, then: • the turnover generated by recently acquired assets must be included in the calculation of the under - taking’s turnover if this turnover must in terms of GAAP or IFRS be included in the turnover of the undertaking; and • the turnover generated by recently divested assets in the immediately previous financial year may be deducted from the undertaking’s turnover if this turnover has been included in the turnover of the undertaking. 2.8 Foreign-to-Foreign Transactions Foreign-to-foreign transactions are subject to merger control in Namibia if they have a local nexus, that is, if the transaction has an effect within Namibia. Under Section 42 (1) of the Competition Act, a merg - er occurs when one undertaking directly or indirectly acquires or establishes control over the business or part of the business of another undertaking. The Com - petition Act applies to all economic activity within, or having an effect within, Namibia. In the event that the target has absolutely no nexus to the jurisdiction – ie, it conducts no business in or which may have an effect in Namibia – and has no assets or turnover in, into or from Namibia, then such a transaction will not be notifiable.
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