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1. Key decisions on Mergers and Acquisitions

1.1  EOH Mthombo (Pty) Ltd v Data World (Pty) Ltd, Data World Information Systems Private Ltd, Evaluations Enhanced Property Appraisals (Pty) Ltd and Xcallibre (Pty) Ltd

The Commission has approved, without conditions, the proposed intermediate merger whereby EOH Mthombo Proprietary Limited (EOH) intends to acquire Data World (Pty) Ltd (Data World), Data World Information Systems Private Limited, Evaluations Enhanced Property Appraisals (Pty) Ltd (Evaluations) and Xcallibre (Pty) Ltd (Xcallibre), collectively referred to as the “target firms”.

EOH is wholly controlled by EOH Holdings Limited (EOH Holdings). EOH Holdings is not controlled by any firm. EOH Holdings and its subsidiaries are referred to as the “acquiring group.” The acquiring group is involved in a wide range of IT services, software, IT infrastructure, industrial technologies and business process outsourcing solutions.

Data World controls Data Information Systems Private Limited. Data World and Evaluations are active in providing property valuation for municipalities. Xcallibre creates and sells automated capture pens. The pen technology creates reports based on information captured on smartphones and tablets, largely used by a mobile workforce in the agricultural industry.

The Commission is of the view that the proposed transaction is unlikely to substantially prevent or lessen competition in any market. The proposed transaction does not raise any public interest concerns.

1.2  Guardrisk Insurance Ltd v RMB Structured Insurance Ltd personal lines, commercial lines and smart device insurance business managed by CIB (Pty) Ltd

The Commission has recommended to the Tribunal that the proposed large merger be approved, without conditions, whereby Guardrisk Insurance Limited (Guardrisk) intends to acquire RMB Structured Insurance Limited (RMBSI) personal lines, commercial lines and smart device insurance business managed by CIB (Pty) Ltd (CIB).

Guardrisk is a wholly-owned subsidiary of Guardrisk Group (Pty) Ltd, a wholly-owned subsidiary of MMI Strategic Investments (Pty) Ltd which is directly controlled by MMI Holdings Limited. The MMI Group develops, markets and distributes short-term and long-term insurance products and offers asset management, savings, investments, healthcare administration, short-term insurance and employee benefits cover services. Guardrisk also provides long-term alternative risk transfer insurance products to corporates and retirement funds to cover post-retirement healthcare liabilities.

The primary target firm is RMBSI personal lines, commercial lines and smart device insurance business managed by CIB. RMBSI is controlled by Swanvest 120 (Pty) Ltd (Swanvest) which is wholly controlled by Santam Limited. RMBSI is a short-term and long-term insurer. The insurance business consists of commercial lines and personal lines insurance policies and smart device insurance policies, mainly relating to property and motor risks, underwritten through brokers. CIB acts as the underwriting manager and acts through brokers when concluding the policies on behalf of RMBSI.

The Commission is of the view that the proposed transaction is unlikely to substantially prevent or lessen competition in the affected short-term insurance markets. In addition, the proposed transaction does not raise any public interest concerns.
 

1.3  Afrikelp (Pty) Ltd, Klub M5 (Pty) Ltd and Ascendis Pharma (Pty) Ltd v Cipla Agrimed (Pty) Ltd, Cipla Vet (Pty) Ltd and Cipla Agrimed Assets and Cipla Vet Assets

The Commission has approved, without conditions, the proposed intermediate merger whereby Ascendis Health Limited (Ascendis Health) intends to acquire Cipla Agrimed Proprietary Limited, Cipla Vet Proprietary Limited, Cipla Agrimed Assets and Cipla Vet Assets (the target firms) from Cipla Health Limited.

The acquiring firms are Afrikelp (Pty) Ltd (Afrikelp), Klub M5 (Pty) Ltd (Klub) and Ascendis Pharma (Pty) Ltd (Ascendis Pharma). The acquiring group is a health and care brands company, offering products aimed at people, plants and animals. The acquiring group sell a range of tick and flea prevention and treatment products for companion animals.

Cipla Agrimed sells a range of scientifically formulated animal health products for production animals (i.e. cattle, sheep, goats, swine, poultry and game) throughout South Africa. Cipla Vet also sells animal health products for companion animals (i.e. cats, dogs and horses). Cipla Vet sells tick and flea prevention and treatment products for companion animals under the Fiprotec brand.

The Commission is of the view that the proposed transaction is unlikely to substantially prevent or lessen competition in the market for the supply of ectoparaciticides for companion animals in South Africa. In addition, the proposed transaction does not raise any public interest concerns.

1.4  Denel SOC Ltd v Turbomeca (Pty) Ltd

The Commission has recommended to the Tribunal that the proposed large merger be approved, with conditions, whereby Denel SOC Limited (Denel) intends to acquire Turbomeca Africa (Pty) Ltd (TMA).

Denel is wholly-owned and controlled by the SA Government under the supervision of the Public Enterprises Department. Denel is a global defence and security equipment manufacturer and provider of related solutions for land, sea and air equipment such as artillery, missiles, aircraft sub-assembly, aircrafts (i.e. civil and military helicopters) and it maintains propulsion systems. Denel is of strategic relevance to national security in South Africa since it provides defence, security and related technologies to the South African Air Force. In South Africa, it supplies (civil and military) helicopters to its only customer SAAF, but globally it supplies to numerous other customers.

Safran HE is a wholly-owned subsidiary of Safran SA, a company registered in France. Safran HE, although having majority shareholding in TMA, currently exercises joint control over TMA with Denel. Safran HE manufactures helicopter engines however, its activities are not relevant for the analysis of the proposed transaction save for the fact that the Safran HE’s helicopter engines are used by Denel in its manufacture of helicopters, specifically for military helicopters.

TMA manufactures parts for original equipment manufacturers for helicopter engines including gears, gearbox castings, shafts and couplings for helicopter engines. TMA also provides services such as marketing, sales, after-sale support and maintenance, repair and overhaul of engine components for aerospace (including helicopters), marine, land and industrial applications. Locally, TMA manufactures engine components for Safran HE, which components are used by Safran HE (the seller in the proposed transaction) to build helicopter engines which are in turn supplied to Denel. Denel uses these engines to build helicopters for SAAF. TMA also renders MRO services to Safran HE for its helicopter engines.
The Commission is of the view that the proposed transaction is unlikely to substantially prevent or lessen competition in the affected markets since it is a move from joint to sole control of TMA by Denel.

The Commission is of the view that the proposed transaction raises public interest concerns in that there are retrenchments that will occur as a result of this merger. In order to remedy these concerns, the Commission recommends that this transaction be approved on condition that the number of merger specific retrenchments is capped and that other merger specific retrenchments are not effected before the expiration of two years from the implementation of the merger. The conditions also require that the merging parties adhere to the relevant Labour Relations Act processes if they proceed to effect the retrenchments.

1.5  ArcelorMittal South Africa Ltd v Sishen Iron Ore Company (Pty) Ltd in respect of the Thabazimbi Mine

The Commission has recommended to the Tribunal that the proposed large merger be approved, without conditions, whereby ArcelorMittal South Africa Limited (AMSA) intends to acquire Thabazimbi Mine from Sishen Iron Ore Company (Pty) Ltd (SIOC).

AMSA is active in the manufacture and supply of long and flat steel products and beneficiated by-products. AMSA also produces coke and chemical products at its coke and chemicals business. The coke that it produces is used by various ferro-alloy producers in their production processes. Of relevance to the proposed transaction are AMSA’s interests in Coza Mining and Polokwane Iron Ore Company (Pty) Ltd (PIOC). Coza Mining is a hematite iron ore mine which is currently not producing any iron ore as it awaits approval of its application for mining rights. PIOC is a magnetite iron ore producer which is also currently not producing any iron ore and it awaits the approval of its prospecting right.

The primary target firm is SIOC in respect of the Thabazimbi Mine. The Thabazimbi Mine is an iron ore mine and its mining activities occur near Thabazimbi, in Limpopo. The Thabazimbi Mine’s supply has been fully absorbed by AMSA’s steelworks in Vanderbijlpark and Newcastle.

The Commission finds that the proposed transaction is unlikely to substantially prevent or lessen competition in the affected markets. In addition, the proposed transaction does not raise any public interest concerns.

1.6  Propertuity Development (Pty) Ltd v Redefine Properties Limited in respect of the property letting enterprise known as Jewel City

The Commission has recommended to the Tribunal that the proposed large merger be approved, without conditions, whereby Propertuity Development (Pty) Ltd (Propertuity Development) intends to acquire the property letting enterprise known as Jewel City owned by Redefine Properties Limited (Redefine).

Propertuity Development, its subsidiaries, controllers and subsidiaries of its controllers are collectively referred to as the “acquiring group.” The acquiring group is a property investment company with a core focus on property development and regeneration of urban spaces. It has a diversified portfolio of commercial, office, residential and retail properties throughout South Africa. The target property is a Grade B office space located in Johannesburg, in Gauteng.

The Commission is of the view that the proposed transaction is unlikely to substantially prevent or lessen competition in the market for the provision of rentable Grade B office space within the Johannesburg CBD node. In addition, the proposed transaction does not raise any public interest concerns.

1.7  Pele SPV 13 (Pty) Ltd v GRI Wind Steel SA (Pty) Ltd

The Commission has approved the proposed intermediate merger, without conditions, whereby Pele SPV 13 (Pty) Ltd (Pele) intends to acquire GRI Wind Steel South Africa (Pty) Ltd (GRI SA).

Pele and its controlling firms are referred to as the acquiring group. Pele is a newly established firm. PGE invests in independent power producing companies by acquiring a minority portion of the issued share capital of the relevant company. PGE finances these investments by obtaining funding from a range of commercial banks and direct funding institutions. PGE further performs operational and management services, co-development services, asset management services, economic development services and engineering, procurement and construction services to various power plants in South Africa.

The primary target firms is GRI Wind Steel South Africa (Pty) Ltd (GRI SA). GRI SA is a manufacturer of steel wind towers. These towers form the base of wind turbines. The wind turbines are then sold by GRI SA’s to independent power producing companies, to be installed on wind farms to generate electricity.

The Commission is of the view that the proposed transaction is unlikely to substantially prevent or lessen competition in any market. The proposed transaction does not raise any public interest concerns.
 

1.8  Spear One (Pty) Ltd v Immovable property and rental enterprise known as 2 Long Street owned by Capital Propfund 1 (Pty) Ltd

The Commission has approved, without conditions, the proposed intermediate merger whereby Spear One (Pty) Ltd (Spear One) intends to acquire Immovable property and rental enterprise known as 2 Long Street (2 Long Street).

Spear One is a diversified property ownership firm, with a portfolio of 27 immovable properties and rental enterprises, which include industrial, office, and retail and hospitality properties in the Western Cape and Gauteng provinces.

2 Long Street is owned and controlled by Capital Propfund 1 (Pty) Ltd and comprises Grade B office space situated at 2 Long Street, Cape Town City Centre, Cape Town in the Western Cape.

The Commission is of the view that the proposed transaction is unlikely to substantially prevent or lessen competition in any market. The proposed transaction does not raise any public interest concerns.

1.9  Diamond (BC) BV  v The Diversey Care division of Sealed Air Corporation and Sealed Air’s Food Hygiene and Cleaning Business within its Food Care Division

The Commission has approved, without conditions, the proposed intermediate merger, whereby Diamond (BC) BV (Diamond) intends to acquire the Diversey Care (Diversey Care) division of Sealed Air Corporation (Sealed Air) and Sealed Air’s Food Hygiene and Cleaning Business within its Food Care Division (Food and Hygiene Cleaning Business).

Diamond is an American company controlled by the funds managed by Bain Capital Investors LLC (Bain Capital). Bain Capital is a private equity investment firm that invests in companies active in the IT; healthcare, retail and consumer products; communications; financial and industrial/manufacturing industries. In SA Bain Capital is active in, among others, IT; manufacturing of hydraulic brake and clutch systems; quick-service restaurant franchising; and technology-based services to the automotive industry.

Diversey Care provides high-performing cleaning solutions and develops and delivers integrated cleaning solutions to business customers. The Food and Hygiene Cleaning Business delivers cleaning hygiene equipment solutions for processors in food and beverage markets.

The Commission is of the view that the proposed transaction is unlikely to substantially prevent or lessen competition in any market. The proposed transaction does not raise any public interest concerns.
 

1.10 Enyuka Prop Holdings (Pty) Ltd v Redefine Properties Ltd in respect of Turfloop Plaza

The Commission has approved, without conditions, the proposed intermediate merger whereby Enyuka Prop Holdings Proprietary Limited (Enyuka) intends to acquire Redefine Properties Ltd (Redefine), in respect of Turfloop Plaza in the Limpopo Province.

Enyuka is a property holding company. The acquiring group is a property holding and investment fund and holds a property portfolio comprising retail, office and industrial properties in South Africa.
Turfloop Plaza is a neighborhood shopping centre situated at 697 Zone A, University Street, Mankweng, Limpopo Province. Turfloop Plaza comprises rentable retail space.

The Commission is of the view that the proposed transaction is unlikely to substantially prevent or lessen competition in any market. The proposed transaction does not raise any public interest concerns.

1.11  HNA Holding Group Company Ltd v CWT Ltd

The Commission has approved the proposed intermediate merger, without conditions, whereby HNA Holding Group Company Limited (HNA) intends to acquire CWT Limited (CWT).

HNA, a limited liability company incorporated in accordance with the laws of Hong Kong, is listed on the Hong Kong Stock Exchange. HNA is a multinational conglomerate with a wide range of business activities, including airport management (in China), logistics and tourism. Locally, HNA provides ground handling, executive aviation, cargo and aviation security services through its South African subsidiaries.

CWT, incorporated in accordance with the laws of Singapore, is listed on the Mainboard of the Singapore Exchange Securities Trading Limited. CWT provides integrated logistics solutions and related services ancillary to its core logistics business. The CWT logistics business includes freight forwarding and cargo consolidation, warehousing, transportation and supply chain management services. Locally, CWT provides shipping, warehousing, customs clearance and freight forwarding services.

The Commission is of the view that the proposed transaction is unlikely to substantially prevent or lessen competition in the affected market.The proposed transaction does not raise any public interest concerns.


1.12  Crosize (Pty) Ltd v Absa Bank Ltd in respect of the property letting known as Absa House

The Commission has approved, without conditions, the proposed intermediate merger whereby Crosize (Pty) Ltd (Crosize) intends to acquire Absa Bank Limited (Absa) in respect of the property letting known as Absa House (Absa House).

The acquiring group owns a diversified rental property portfolio located throughout South Africa and includes office, industrial and retail properties.

Absa House, a property letting enterprise located in Cape Town, is wholly controlled by Absa. Absa House includes immovable property, buildings, fixed assets and lease agreements from Absa. The property comprises rentable Grade B office space.

The Commission is of the view that the proposed transaction is unlikely to substantially prevent or lessen competition in the market for the provision of the rentable Grade B office space. In addition, the proposed transaction does not raise any public interest concerns.

1.13  Auric Auto (Pty) Ltd v Auto Atlantic (Pty) Ltd

The Commission has approved, without conditions, the proposed intermediate merger whereby Auric Auto (Pty) Ltd (Auric) intends to acquire Auto Atlantic (Pty) Ltd (Auto Atlantic).

Auric operates a BWM and MINI dealership located in Claremont, Cape Town, in terms of Franchise Agreements concluded with BMW South Africa (Pty) Ltd (BMW SA). Auric is involved in the sale of new and used BMW and MINI branded vehicles, sale of genuine BMW and MINI parts, vehicle maintenance and repair services and vehicle finance and insurance products.

Auto Atlantic operates a BMW and MINI dealership in accordance with a Franchise Agreement concluded with BMW SA. Auto Atlantic is involved in the sale of new and used passenger BMW and MINI branded vehicles, the maintenance and repair of vehicles as well as the sale of genuine parts and accessories, and vehicle finance and insurance products. Auto Atlantic is located in Cape Town City Centre and Auto Repair Centre is located in Milnerton, Cape Town.

The Commission is of the view that the proposed transaction is unlikely to substantially prevent or lessen competition in the market for the sale of used passenger vehicles. In addition, the proposed transaction does not raise any public interest concerns.

Non Referrals: The Commission has taken a decision to non-refer (not to prosecute) the following cases:

2.1  Dippenaar Reinecker v UNISA, University of Witwatersrand and Tshwane University of Technology
The Commission is of the view that the conduct complained of does not contravene the Competition Act.

2.2  Lotterie Holdings (Pty) Ltd v Liberty Life
The Commission is of the view that the conduct complained of does not contravene the Competition Act.

2.3 Boitumelo Logistics v Imperial Logistics
The Commission is of the view that the conduct complained of does not contravene the Competition Act.

2.4 Kholekile Ntsobi Herbert v Volvo SA, Peugeot SA, Citron SA and Wesbank
The Commission is of the view that the conduct complained of does not contravene the Competition Act.

2.5 Proinvest Software v National Treasury
The Commission is of the view that the conduct complained of does not contravene the Competition Act.

2.6  Innocent Gwisai v White Rock Property Trading (Pty) Ltd, Absa Bank, Honeydew Quickstop CC, Bruno Attorneys and Sheriff of Sandton North
The Commission is of the view that the conduct complained of does not contravene the Competition Act.

2.7  Chabana v Central University of Technology Free State
The Commission is of the view that the conduct complained of does not contravene the Competition Act.

2.8  Harry Greenberg v Belgotex
The Commission is of the view that the conduct complained of does not contravene the Competition Act.

Issued by Competition Commission of South Africa