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CARICOM Competition Commission monitoring sale of Scotiabank

Friday, December 07, 2018

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PARAMARIBO, Suriname (CMC) The Suriname-based CARICOM Competition Commission (CCC) says it will assess any impact of the proposed acquisition of Scotiabank by the Trinidad-based Republic Financial Holdings Limited (RFHL) in accordance with the Revised Treaty of Chaguaramas (RTC) that governs the regional integration movement.

Antigua and Barbuda and Guyana have expressed reservations about the proposed acquisition, with St John's indicating that it would not be issuing a vesting order to facilitate the move.

A RFHL statement said that the banks being acquired are located in Guyana, St Maarten, Anguilla, Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis, St Lucia, and St Vincent and the Grenadines.

It said that the purchase price is US$123 million, which represents US$25 million consideration for total shareholding of Scotiabank Anguilla Limited; and a premium of US$98 million over net asset value for operations in the remaining eight countries.

The CCC, which was established by Article 171 of the RTC, is mandated to promote and protect competition within the Community and according to its chairman, Justice Christopher Blackman, in its monitoring of business activity in the CARICOM Single Market and Economy (CSME), it has taken note of the planned sale.

The Commission said it has further noted the concerns of bank customers and governments across the region regarding the proposed acquisition of Scotiabank.

“The Commission advises that it shall continue to monitor these developments in the banking and insurance sectors. Any impact to the Community market by the proposed acquisitions will be assessed in accordance with the RTC,” Justice Blackman said.

He said the Commission has since advised that it would continue to monitor the developments in the banking and insurance sectors.

“Any impact to the Community market by the proposed acquisitions will be assessed in accordance with the RTC,” Justice Blackman said, using the opportunity to highlight the need for strong national and regional competition rules and frameworks.

“Despite the need for these regulatory tools, the Commission stands ready to support the Member States of the CSME and financial sector regulators in analysing competition effects of the proposed acquisitions in their respective national or sub-regional jurisdictions.

“As always, the Commission remains committed to a process that is fair and transparent in the determination of any regulatory matter where the interests of both business and consumers must be considered,” he said.

At the end of their special CSME summit in Trinidad earlier this week, CARICOM government leaders urged Caribbean based companies to look outward and seek to acquire companies that even operate on the international market, as they reacted to the proposed sale.

The regional leaders said that it was important for the region to promote and develop and environment that would ensure the Caribbean is able to lure much more investors into the region.

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