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Key decisions on mergers and acquisitions
 
 
Rebel Packaging (Pty) Ltd (Rebel) v Seyfert Corrugated Western Cape (Pty) Ltd (Seyfert)
 
The Commission has prohibited, the acquisition of 49% share by Rebel in Seyfert. The parties to this transaction have implemented this merger in 2011 without obtaining approval from the competition authorities.  
 
The Commission investigation of this merger found that the merger facilitated collusion between Mpact and Seyfert. The Commission notes that Mpact did not acquire sole control of Seyfert and as such Mpact and Seyfert did not constitute a single economic entity. Therefore the collusion between Mpact and Seyfert violated section 4(1)(b) of the Competition Act. The prior implemented merger between Mpact and Seyfert had therefore substantially prevented and lessened competition.
 
Given the nature of the anti-competitive concerns this merger raise, namely collusion which is a prohibition in terms of section 4(1)(b) of the Act, there is no efficiencies that can justify it and remedy that could alleviate it.
 
In order to address this concern, the Commission prohibited the merger. Further, the Commission ordered divestiture of Mpact 49% share in Seyfert since the merger had already been implemented.
 
Mpact is a paper and plastics packaging manufacturer with operations in South Africa, Mozambique, Namibia and Botswana. The business involves the production of paper and plastic packaging products, and recycling (of both paper and plastic). Mpact’s paper business comprises of three parts, each of which operates at a different level of the paper and paper packaging value chain. Mpact Recycling is active in the collection and purchase of pre- and post-consumer recyclable paper through various paper pickup programmes including commercial, kerbside, school, church, community, housing complex and office programmes. Mpact Recycling also purchases recyclable paper from recyclable material traders.
 
Mpact’s paper manufacturing operations produce a range of intermediate paper products such as cartonboard and containerboard. In addition, it holds distribution rights to sell Baywhite, a premium quality white top kraftliner produced by Mondi Limited. Mpact manufactures paper from a combination of recyclable paper and relatively smaller amount of virgin material.
 
Seyfert operates as a sheet plant and is based in Atlantis near Cape Town in the Western Cape. Prior to Mpact acquiring its shareholding in Seyfert, Seyfert was located in premises in Epping near Cape Town. Sheet plants purchase corrugated sheet board from corrugating facilities and convert this board into boxes and other finished products.
 
The merging parties submit that the 2011 transaction did not have a negative impact on employment at Seyfert or Mpact. The Commission is satisfied that the merger did not result in any overall negative impact on employment as the same number of employees at the time of the merger are currently employed by the target firm. The prior implemented transaction did not raise any other public interest concerns.
 
Veolia Africa S.A. (Veolia Africa) v Energipole South Africa (Pty) Ltd (ESA)
 
The Commission has approved, without conditions, the proposed merger whereby Veolia Africa intends to acquire ESA.
 
Veolia Africa is indirectly controlled by Veolia Environnement. Of relevance to South Africa is Veolia Water Technologies (VWT), an indirectly controlled subsidiary of Veolia Environnement. In South Africa, VWT controls Veolia Water South Africa (Pty) Ltd (Veolia Water SA); Veolia Water Solutions and Technologies South Africa (Pty) Ltd (VWS & Technologies SA); and Durban Water Recycling (Pty) Ltd (DWR).
 
VWS & Technologies SA and Veolia Water SA are involved in the design and construction of turnkey plants for water treatment (drinking water, waste water and process water); and construction and sale of standard water treatment units. VWS & Technologies SA and Veolia Water SA are also involved in the operation, maintenance and services of water treatment units.
ESA is a firm incorporated in South Africa. In South Africa, ESA operates through its wholly owned subsidiary, DCLM. DCLM is a waste management services company with a landfill site located in KwaDukuza, KwaZulu Natal. DCLM is active in the classification, collection, disposal and treatment of both hazardous and non-hazardous waste.
 
The Commission found that the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in the relevant markets. The Commission further found that the proposed transaction does not raise public interest concerns.
 
Dassault Aviation S.A (Dassault) v ExecuJet Maintenance (Pty) Ltd (Execujet Maintenance)
 
The Commission has approved, without conditions, the proposed merger whereby Dassault intends to acquire ExecuJet Maintenance.
           
The Dassault Group is active in the aviation sector as an Original Equipment Manufacturer (OEM). As a global player, Dassault Group is active in the manufacturing of aircrafts for: (i) defence aviation; (ii) civil aviation; and (iii) space aviation. In South Africa, Dassault Group’s activities include selling aircraft spare parts exclusively for its own OEM aircrafts to South African Maintenance, Repair and Overhaul services or business (MRO operators). These MRO operators will then resell the spare parts to the end customers as part of their MRO services.
           
Execujet Maintenance is active in the provision of MRO services to a variety of business jets and aircraft engines. Execujet Maintenance has a pre-existing relationship with Dassault whereby Execujet Maintenance is an Authorised Service Centre (ASC) for Dassault in relation to its civil aircrafts although Execujet Maintenance also provides MRO services for other aircrafts.
 
The Commission found that the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in the relevant markets. The Commission further found that the proposed transaction does not raise public interest and employment concerns.
 
Subtropico Limited (Subtropico) v KLK Landbou Limited (KLK)
 
The Commission has approved, with conditions, the proposed merger whereby Subtropico intends to acquire KLK.
           
Subtropico offers various products and services in the agricultural industry, including the processing and packaging of agricultural produce, livestock auctioneering, financial services and the operation of a fresh produce market.
           
KLK offers products and services in the motor industry, meat trade and abattoirs, , trade and building stores, petroleum and retail fuel stations, livestock auctioneering and financial services.
 
The Commission found that the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in the relevant markets. As a result of concerns that were raised during the merger assessment, the Commission has imposed a condition on the proposed transaction. The merging parties will not retrench any employees, as a result of the proposed transaction, for a period of 2 years.
 
McCarthy (Pty) Ltd (McCarthy) v The Motor Dealership t/a Vereeniging Auto owned by Vereeniging Motors (Pty) Ltd (Vereeniging Auto)
 
The Commission has recommended to the Tribunal that the proposed merger, whereby McCarthy intends to acquire Vereeniging Auto, be approved, without conditions.
 
McCarthy, is duly incorporated in South Africa. McCarthy is a wholly-owned subsidiary of the Bidvest Group Limited (Bidvest). Bidvest is diversified across multiplicity of markets with the services offered through different business divisions. McCarthy operates motor dealerships which are active in the sale of new and used passenger vehicles, light commercial vehicles (LCV’s) and trucks.
 
Vereeniging Auto is a motor dealership active in the sale of new and used Ford passenger vehicles and LCV’s. In addition, both McCarthy and Vereeniging Auto also provide after-sales services and act as intermediaries in the provision of financial and insurance services during the purchase of vehicles.
 
The Commission found that the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in the relevant markets. The Commission further found that the proposed transaction does not raise any public interest concerns.
 
2667980 Ontario Inc. (Ontario) v AGT Food and Ingredients Inc. (AGT)
 
The Commission has recommended to the Tribunal that the proposed merger, whereby Ontario intends to acquire AGT, be approved, without conditions.
 
Ontario is a wholly owned subsidiary of Fairfax Financial Holdings Limited (FFH). FFH is a holding company which, through its subsidiaries, is active in the property and casualty insurance and reinsurance and investment management. FFH also indirectly controls AFGRI Holdings. AFGRI provides services across the entire grain production and storage cycle, offering financial support and solutions as well as inputs and high-tech equipment through the John Deere brand.
 
AGT is a supplier of value-added pulses, staple foods and food ingredients. In South Africa, AGT supplies seeds for planting. It also produces various crops for both planting and consumption purposes. AGT also supplies seeds for human consumption into the healthy foods and bakery markets. It also wholesales and mills spices as well as flour for the Health Food market and supplies pre-packaged grains and pulses including microwave popcorn to the chain stores countrywide. AGT distributes its products locally and internationally.
 
The Commission found that the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in the relevant markets. The Commission further found that the proposed transaction does not raise any public interest concerns.
 
Balwin Rentals (Pty) Ltd (Balwin Rentals v 1056 residential units in the Greenpark development, 1728 residential units in the Greenlee development, and 1760 residential units in the Greencreek development (the Target Properties)
 
The Commission has recommended to the Tribunal that the proposed merger, whereby Balwin Rentals intends to acquire the Target Properties, be approved, without conditions.
 
Balwin Rentals and the firms controlling it (the “Acquiring Group”) are, amongst others, involved in the building and selling of residential property and the buying and letting of residential properties to third parties. These activities take place across South Africa.
 
The Target Properties are residential rental property units built by the Acquiring Group and located in Boksburg, Linbro Park and Pretoria.
 
The Commission found that the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in the relevant markets. The Commission further found that the proposed transaction does not raise any employment or other public interest concerns.  
 
 
Bayete Capital (Pty) Ltd (Bayete Capital) v Old Mutual Insure Limited (OM Insure) in respect of the OM Insure building and parking space (Target Property)
 
The Commission has approved, the proposed merger, without conditions, whereby Bayete Capital intends to acquire the Target Property from OM Insure.
 
Bayete Capital is involved in services related to property development and property investment. These services include, financial services, research development, and consulting. Of relevance to the proposed transaction, Bayete Capital owns Grade A office space in areas such as Braamfontein and Bryanston (Gauteng Province).
 
The Target Property is comprised of a Grade A office space situated in the Johannesburg CBD.
 
The Commission found that although the merging parties activities overlap with regard to Grade A office property, the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in any relevant markets. The Commission further found that the proposed transaction does not raise any public interest and employment concerns.
 

Infinity Partners Investment (Pty) Ltd (Infinity Partners) v Aveng Water (Pty) Ltd (Aveng Water)
 
The Commission has approved, without conditions, Infinity Partners proposal to acquire Aveng Water.
 
Infinity Partners, provides funding and skills support to help historically disadvantaged budding entrepreneurs to grow and establish businesses. This support includes capital, business model development, commercial viability and facilitating market access. Some of the sectors in which Infinity Partners is invested includes the hair grooming, catering, automotive and entertainment sectors.  
 
Aveng Water is a water treatment processing engineering company with a broad service offering from project development to long term operations and maintenance.
 
The Commission found that the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in any market relevant market. The Commission further found that the proposed transaction does not raise any employment or other public interest concerns.
 

Monarch Merger Corporation (Monarch) v Multi-Color Corporation (MCC)
 
The Commission has approved without conditions, Monarch’s proposed acquisition of MCC.
 
Monarch is a wholly owned subsidiary of W/S Packaging Holdings Inc. (W/S Packaging). W/S Packaging is ultimately controlled by Platinum Equity, LLC (Platinum Group and collectively, the “Acquiring Group”). Platinum Group is a private equity investment firm that holds interests in various firms. The Acquiring Group, through W/S Packaging, manufactures pressure-sensitive product labels, glue applied (cut’ n stack), shrink sleeve and in-mould product labels to customers active in various industries which include food and beverage, consumer packaged goods and the pharmaceutical industries globally. In South Africa, W/S Packaging’s only activity is to supply slot tickets. Slot tickets are slips of paper used in modern casino slot machines for the purpose of printing barcoded vouchers that punters use to redeem winnings or pre-loaded money at an automated kiosk.
 
MCC supplies labels such as pressure sensitive labels, glue-applied labels (cut’ n stack), shrink sleeve and in-mould labels in various countries, including South Africa.
 
The Commission found that the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in any market relevant market. The Commission further found that the proposed transaction does not raise any employment or other public interest concerns.
 

SEMA Holdings Ltd (SEMA) v CWT Aquarius Shipping (Pty) Ltd (CWT Aquarius)
 
The Commission has approved without conditions, SEMA’s proposal to acquire CWT Aquarius.
 
SEMA’s activities in South Africa include the provision of line-haul transportation (long distance and cross border road transport services) services in respect of equipment, chemicals and consumables as well as minerals using flatbed trucks.
 
In South Africa, CWT Aquarius provides shipping, warehousing customs clearance and freight forward services.
 
The Commission found that the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in any relevant markets given that SEMA already controls CWT Aquarius, pre-merger. The Commission further found that the proposed transaction does not raise any employment or other public interest concerns.
 
SAFOPS Investment Holdings (Pty) Ltd (SIH) v The Safair Investment Trust (SIT)
 

The Commission has approved without conditions, SIH’s proposal to acquire SIT.

SIH is a global aviation company with airlines based in Europe, Africa and Asia. These airlines offer a range of services including aircraft crew maintenance and insurance (ACMI), airline back-up, charter and scheduled operations in both the cargo and passenger markets as well as aircraft leasing. In South Africa, SIH conducts aircraft leasing and maintenance services for the airline operated by Safair, Flysafair.

SIT’s activity is to hold a 49% interest in Safair, which operates Flysafair. FlySafair is a low-cost airline servicing a full domestic schedule including flights between Johannesburg, Cape Town, Durban, Port Elizabeth, East London and George.

The Commission found that the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in the relevant markets. The Commission further found that the proposed transaction does not raise any employment or other public interest concerns.
 
Non Referrals: The Commission has taken a decision to non-refer (not to prosecute) the following cases:
 
2.1   Leslie Collin Julies v Astron SA and Astron Energy SA
The Commission has taken a decision to non-refer the complaint due to prioritisation principle
 
2.2   Stanley Chukudu (Tshukudu Mnika Tall Holdings) v Charles Maake, Tshepo Maluka (Maphanga Enviro Services), Alistor Pomton (Rivanet Exploration), Phasha (National Intelligence Agency)
The Commission is of the view that the conduct complained of does not contravene the Competition Act
 
2.3   Nkonko Oscar Lebea v HSBC Bank London
The Commission is of the view that the conduct complained of does not contravene the Competition Act
                                             
2.4   Previsha Pillay v Discovery Health (Pty) Ltd and Discovery Health Medical Scheme
The Commission is of the view that the conduct complained of does not contravene the Competition Act.
 
2.5   Anonymous v Hyprop Investments Limited and all major malls in South Africa
The Commission is of the view that the conduct complained of does not contravene the Competition Act.
 
2.6   Forrester Olivier v Arysta Life Sciences and Department of Transport and Public Works

The Commission is of the view that the conduct complained of does not contravene the Competition Act.
 

2.7   Desmond Lockey v Nick Stodel

The Commission is of the view that the conduct complained of does not contravene the Competition Act.
 
2.8   Sangengalo Marble & Granite v International Slab Sales and Caesarstone South Africa
The Commission is of the view that the conduct complained of does not contravene the Competition Act.
 
2.9   Victor Voorendyk v the National Department: Health and the Minister
The Commission is of the view that the conduct complained of does not contravene the Competition Act.
 
2.10   Dennis Moses v Imperial Head Office Johannesburg
The Commission is of the view that the conduct complained of does not contravene the Competition Act.
 
2.11   Biocom Biotech v BD Biosciences (Pty) Ltd
The Commission is of the view that the conduct complained of does not contravene the Competition Act.
 
2.12   Super Group trading (Pty) Ltd v Makro South Africa (Pty) Ltd
The Commission is of the view that the conduct complained of does not contravene the Competition Act.
 
2.13   Competition Commissioner v Makro South Africa (Pty) Ltd
The Commission is of the view that the conduct complained of does not contravene the Competition Act.
 
2.14   The Presidency v Naaz Office Consumables CC and six others
The Commission is of the view that the conduct complained of does not contravene the Competition Act.
 
2.15   Competition Commission v African Oxygen Limited &Totalgaz Southern Africa
The Commission is of the view that the conduct complained of does not contravene the Competition Act.
 
2.16   David Bloch v ACSA Parking
The Commission is of the view that the conduct complained of does not contravene the Competition Act.
 

 
Issued by The Competition Commission of South Africa