No change in the US$140.3 million price agreed back in December 2022

Durrant Pate/Contributor

Trinidad-based conglomerate, Massy Holdings has completed the acquisition of Industrial Gases Limited (IGL), the Jamaican distributor of cooking gas and the manufacturer and distributor of industrial and medical gases.

President and CEO of Massy Holdings, Gervase Warner made the confirmation on the weekend whilst speaking in the twin island republic. There has been no change in the US$140.3 million price, which was agreed on December 19, 2022, when Massy gave the green light for the acquisition.

The purchase of IGL was executed by Massy Gas Products Holdings Ltd, a wholly-owned subsidiary of the group, which entered into a share purchase agreement with Caribbean Petroleum Marketing to acquire 100% of the share capital of IGL (St Lucia), which owned 100% of the share capital of IGL.

Regulatory approval

Massy got regulatory approval to proceed with the acquisition of IGL, even though concerns were raised that combining IGL with Gas Pro, the brand through which Massy distributes cooking gas in Jamaica, could result in the T&T company having a virtual monopoly of the island’s cooking gas market. As a result, there were fears that the combined entity’s market dominance of the cooking gas market could result in the abuse of smaller LPG (Liquid Petroleum Gas) suppliers and consumers.

However, it was pointed out that the combination of Gas Pro and IGL would account for just over 70%of the total cooking gas market in Jamaica. On May 17 2023, Massy completed the acquisition of IGL Jamaica after signing a consent agreement with the Jamaica Fair Trading Commission (FTC).

The commission granted Massy permission to acquire IGL, even though the country’s competition regulator concluded that the purchase “without more, would likely result in a lessening of competition,” in the north Caribbean country’s cooking gas market.

FTC gives non-objection

The FTC indicated that based on the conditions set out in the consent agreement, it issued a statement of non-objection to the consummation of the sale and purchase agreement, which will see Massy acquiring 100% control of IGL.  In its July 2023 newsletter, the FTC said as a result of the concerns it negotiated a consent agreement with Massy to mitigate the anticipated adverse competition effect on the market for LPG.

According to the Jamaican competition regulator, “In conducting the assessment, the FTC sought the views of other market participants on their scope for expansion and of commercial customers on whether they will likely be harmed by the acquisition. The FTC concluded that the acquisition would result in a dominant supplier of LPG as Massy and IGL are the top two bulk suppliers of LPG island-wide in both the residential and commercial segments of the market.”

The LPG industry in Jamaica is reportedly one of the industries which has seen an increase in competition in the last three years, with over ten new companies entering the space. The market is characterised by robust and increasingly strong competition and will continue to be characterised by vigorous commercial rivalry.