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Mr Price Group Limited (Mr Price)/ Otto Brothers Distributors (Pty) Ltd (Otto Brothers)

The Commission has recommended that the Competition Tribunal (Tribunal) conditionally approve the proposed transaction whereby Mr Price intends to acquire Otto Brothers.

Mr Price is a national clothing retailer offering apparel (both fashion and sport clothing), footwear, accessories and related goods (such as homeware and mobile products) under various brands through a total of 1,254 stores in South Africa. In addition to its operations in South Africa, Mr Price operates in other African countries, including Botswana, eSwatini, Ghana, Lesotho, Kenya, Namibia and Zambia. Mr Price operates through the following five trading divisions: (i) Mr Price Apparel, (ii) Miladys, (iii) Mr Price Sport, (iv) Mr Price Home and (v) Sheet Street. Mr Price targets a wide range of customers and is well known for its fashion-value offering. Mr Price also has an established financial services division, Mr Price Money, which focuses on offering credit, insurance products, cellular offering as well as value-added services.

The Target Business is the retail apparel business operated by Otto Brothers, trading as Power Fashion. Power Fashion is a national clothing retailer with its headquarters in Durban, KwaZulu Natal. Power Fashion was founded in the 1950s as a family-run business and is currently owned and run by Mr Noel Otto and Mr Michael Otto – the 3rd generation of the family running the business. Power Fashion has 159 stores in South Africa, which are typically located in ‘high street’ and community-centred malls, and commuter nodes, rather than in regional and super regional locations. It does not have an online sales channel or its own private store label credit offering, and its products are only available for purchase in stores.

In line with the concerns raised by the DTIC Minister, the Commission also considered the effect that the proposed transaction may have on the South African Clothing, Textiles, Footwear and Leather industry. In this regard, the Commission engaged the merging parties to establish if there are any positive public interest outcomes that are likely to arise from the proposed merger, in terms of improving local procurement in accordance with the vision and objectives of the R-CTFL Masterplan initiative. The Commission notes that Mr Price Group is already a participant in the R-CTFL Masterplan initiative. One of the objectives of the R-CTFL Masterplan initiative is to increase the share of local retail sales of locally manufactured clothing and footwear to 65% by 2030. This initiative aims to improve the competitiveness of the local clothing industry through its import replacement programme which will ensure local procurement and promote employment levels in South Africa.

The Commission therefore requires Mr Price to remain committed to local procurement post-merger and also extend this commitment to Power Fashion by ensuring that Power Fashion maintain or improve the current level of procurement of goods and services from South African sources, for a period of 5 years following the approval of the current transaction.

In light of the above, the Commission recommends conditions that seek to promote local procurement within the Mr Price Group post-merger.

Ultimo Properties (Pty) Ltd (Ultimo) and JD Consumer Electronics and Appliances (Pty) Ltd (CEA)/ Part of the rental enterprises of Steinhoff Properties (Pty) Ltd (Steinprop), and JD Group Property Holdings (Pty) Ltd (JD Group) and Tanzanite Treasure Trading 7 (Pty) Ltd (Tanzanite), and Showboat Trade and Invest 17 (Pty) Ltd (Showboat) and Copperzone 185 (Pty) Ltd (Copperzone)

The Commission has recommended that the Competition Tribunal (Tribunal) conditionally approve the proposed transaction whereby Ultimo and CEA intend to acquire part of the rental enterprises of Steinprop, JD Group, Tanzanite, Showboat and Copperzone. 

Ultimo is wholly owned by Ultimo Holdings (Pty) Ltd which is in turn wholly owned by Pep Investments (Pty) Ltd (Pep Investments). CEA is wholly owned by Profurn (Pty) Ltd which is in turn wholly owned by Pepkor Trading (Pty) Ltd (Pepkor). Pep Investments and Pepkor are both wholly owned by Pepkor Holdings Ltd (Pepkor Holdings). Ultimo, CEA and all their subsidiaries will be collectively referred to as the “Acquiring Group”.

The South African operations of the Acquiring Group include a number of major retail businesses, comprising discount, value and speciality stores. Of relevance to this transaction is the property business of the Acquiring Group. The Acquiring Group owns 16 properties in the Western Cape including 1 A-Grade office property, 1 B-Grade office property, 1 C-Grade office property, 2 warehouses, 1 light manufacturing property, 1 high grade industrial property, 6 street front retail properties and 3 vacant land.

The primary target firms are the following rental enterprises together with the written lease agreement in respect of each property:

(a) The one half undivided share of Copperzone 185 (Pty) Ltd (Copperzone) in Nelspruit Property in Mpumalanga;

(b) JD Group Property Holdings (Pty) Ltd (JD Group)’s Jet Park Property in Gauteng; PE Property in Eastern Cape; Polokwane Property in Limpopo; Tzaneen Property in Limpopo; Vryburg Property in North West;

(c) Showboat Trade and Invest 17 (Pty) Ltd (Showboat)’s Kokstad Property and Richards Bay Property in Kwa-Zulu Natal; and

(d) Steinhoff Properties (Pty) Ltd (Steinprop)‘s East Gate Property in Gauteng; Cliffdale Property in Kwa-Zulu Natal; and Kuils River Property in Western Cape..

In addition, the Acquiring Group is also acquiring Tanzanite’s right, title and interest in and to, and its obligations under the written lease agreement in respect of portion A of the Groblersdal Property (Groblersdal lease agreement) in Limpopo.

Copperzone, JD Group, Showboat, Steinprop and Tanzanite are all directly or indirectly owned by Steinhoff Africa Property Services which is ultimately owned by Steinhoff Investment Holdings N.V.

The Commission found that the proposed transaction is unlikely to result in a substantial prevention or lessening of competition.

The Commission found that the proposed transaction is likely to result in employment concerns. The Commission has recommended that the proposed transaction be approved subject to employment conditions.  

Al Rayyan Holding LLC (Al Rayyan)/ Enel Green Power Matimba 1 s.r.l (“NewCo 1”)

The Commission has recommended that the Tribunal approve the proposed transaction whereby Al Rayyan intends to acquire joint control over NewCo 1, without conditions. 

Al Rayyan is wholly owned by Qatar Investment Authority (“QIA”), Qatar’s sovereign wealth fund. QIA’s only activities in South Africa is through its controlling interest in Qatar Airways. 

NewCo 1 controls certain renewable energy independent power producer companies that were awarded bids under South Africa’s Renewable Energy Independent Power Producer Procurement Programme.

The Commission found that 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 concerns.

Kalander Kapitaal (Pty) Ltd (“Kalander”) and Fynbos Kapital (Pty) Ltd (“Fynbos”) / Limietberg Sekuriteit (Pty) Ltd and Newco (Sekuriteit)

The Commission has recommended that the Tribunal approve the proposed transaction whereby Kalander and Fynbos intend to acquire Sekuriteit, without conditions.

Kalander, Fynbos and its subsidiaries are collectively referred to as the “Acquiring Group”. The Acquiring Group is an investment holding company that invests in (a) unlisted private companies and (b) strategic minority (non-controlling) stakes in listed companies. Amongst other investments, the Acquiring Group’s predominate asset is listed shares in Capitec Holdings Limited (“Capitec”) and the investment in Capitec shares makes up greater than 90% of its total assets. The remaining assets include non-controlling interest in listed companies and loans.

Sekuritiet is an investment holding company with minority shareholding in Capitec (a listed company) and borrows funds and advances these to other entities.

The Commission found that 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 concerns.

1.5       Creadev International S.A.S (Creadev) / eAdvance Proprietary Limited (eAdvance)

The Commission has conditionally approved the proposed merger whereby Creadev intends to acquire eAdvance. 

Creadev and its holdings companies do not directly or indirectly control any firms that operate in South Africa, nor derive revenue in or from South Africa or hold assets in South Africa.

eAdvance operates a network of private schools trading as SPARK Schools. eAdvance mainly offers pre-primary (grade R) and primary private schooling. SPARK Schools also operate one private high school. SPARK Schools are currently located in the Western Cape and Gauteng Provinces.

The Commission found that the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in any relevant markets. 

The proposed transaction does not have a negative effect on public interest. The Commission however notes that eAdvance has retrenched employees over the past year for operational reasons.  However, due to good faith negotiations between the Commission, the DTIC and the merging parties, the merging parties agreed to a condition that eAdvance will offer suitable employment opportunities to the retrenched employees as and when positions become available in eAdvance for a period of 24 months following the implementation date.  

1.6       Fidelity ADT Monitoring Proprietary Limited (Fidelity ADT)/ 7 Arrows Security Proprietary Limited in respect of its Armed Response and Monitoring and Residential Guarding businesses (7 Arrows)

The Commission has unconditionally approved the proposed merger whereby Fidelity ADT intends to acquire 7 Arrows.

Fidelity ADT is a security solutions provider in South Africa, offering a range of protection services and equipment. Fidelity ADT provides the following products and services: cash solutions which entail cash-in-transit services, cash processing services and cash handling devices; static guarding services; monitoring and response services; electronic solutions; parking management services; specialised services, which entail events and VIP services, tactical air and ground support intelligence, customised asset protection service, labour unrest and strikes, and specialised services unit; integrated fire systems and retail solutions.

7 Arrows is a wholly owned subsidiary of CSG Holdings Limited ("CSG"). CSG is a public company listed on the Johannesburg Stock Exchange and is not controlled by any firm. CSG controls numerous subsidiaries in South Africa, however none of them are relevant for assessing this transaction.  The Target Business does not control any firms.

The Target business comprises of residential monitoring and response services, as well as residential guarding services.

The Commission found that 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 concerns. 

1.7       Motus Group Limited (Motus Group)/ The automotive aftermarket parts, tools and accessories business currently owned by Miren Spare (Pty) Ltd t/a Discount Midas Rustenburg (Discount Midas) and The automotive aftermarket parts, tools and accessories business currently owned by Al Ghair Distributors (Pty) Ltd (AI Ghair Distributors)

The Commission has unconditionally approved the proposed merger whereby Motus Group intends to acquire Discount Midas and AI Ghair Distributors.

The Motus Holdings Group offers a differentiated value proposition to original equipment manufacturers ("OEMs"), customers and business partners with a fully integrated business model across the automotive value chain through four key business segments namely Import and Distribution, Retail and Rental, Motor-Related Financial Services and Aftermarket Parts. Through its aftermarket parts division (“Motus Aftermarket Parts Division”), the Motus Holdings Group supplies, inter alia, vehicle spare parts, engine parts and accessories to various franchisees and customers in Southern Africa, the United Kingdom and China.

Discount Midas is a retailer of aftermarket vehicle spare parts and accessories, tools and additives. The products supplied by Discount Midas include replacement parts that fall into the following product categories: (i) service and tune-up parts; (ii) suspension components; (iii) wheels; (iv) electrical systems (v) cooling systems; (vi) accessories; (vii) braking systems; (viii) ignition systems; (ix) engine components; (x) car body parts; (xi) diesel engine parts; (xii) tools and accessories; (xiii) driveline parts; (xiv) lighting and vision systems; (xv) sealing parts; (xvi) fuel systems; (xvii) oil systems; and (xviii) garage equipment.

Al Ghair Distributors is a wholesaler of the abovementioned auto parts products. Notably, a majority of its revenue is derived from sales made to Discount Midas itself. 

The Commission found that 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 concerns. 

1.8       Ice-Water Acquisition Limited (Ice-Water Acquisition)/ Enterra Holdings Limited (EHL)

The Commission has unconditionally approved the proposed merger whereby Ice-Water Acquisition intends to acquire EHL.

Ice Water Acquisition is a corporation existing under the laws of the Province of Nova Scotia, Canada. Ice-Water Acquisition is a special purpose vehicle formed for purposes of this transaction and therefore does not conduct any business activities. Ice-Water Acquisition is a wholly owned subsidiary of WSP Global Inc. (“WSP”), a company incorporated under the laws of Canada and listed on the Toronto Stock Exchange.

WSP is active in the provision of professional engineering, design and consulting services. Through its subsidiaries and affiliates, WSP offers a variety of design, consulting and management services through all phases of project execution, from the initial development and planning stages, through to the design, construction, commissioning and maintenance phases.

EHL is a company existing under the laws of the Province of Nova Scotia LDC in Canada. EHL is the holding company of Golder Associates Corporation (“Golder”). EHL Golder and all firms controlled by Golder are collectively referred to as the Target Group. 

The Target Group is an engineering and consulting firm providing environmental services to clients in the mining, manufacturing, oil & gas, power and infrastructure industries. In South Africa, the Target Group provides similar services such as environmental social impact assessments, water treatment assessments and site supervision.

The Commission found that 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 concerns.  

1.9       WBG Holdings (Pty) Ltd (WBG Holdings)/ PMB Petroleum Services (Pty) Ltd (PMB Petroleum)

The Commission has unconditionally approved the proposed merger whereby WBG Holdings intends to acquire PMB Petroleum.

WBG Holdings is a licensed fuel wholesaler, purchasing and supplying prescribed petroleum products in bulk quantities to licenced manufacturers, retailers and end consumers. WBG Holdings operates on a national basis, principally operating in Gauteng, Mpumalanga and KZN.

PMB Petroleum is also a licensed fuel wholesaler, which operates in Pietermaritzburg, KwaZulu-Natal.

The Commission found that 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 concerns.

1.10    RCL Foods Limited (RCL Foods) / the LiveKindly Company Africa Proprietary Limited (Livekindly Africa)

The Commission has unconditionally approved the proposed merger whereby RCL Foods intends to acquire joint control over Livekindly Africa. 

RCL Foods produces a wide range of branded and private label food products. RCL Foods also provides logistics for fast moving consumer goods.

Livekindly Africa is a joint venture between RCL Foods and The Livekindly Company Inc (“tLKc”). Livekindly Africa will distribute tLKc’s plant based convenience food brands such as Fry’s  LikeMeat and Oumph!.   

The Commission found that 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 concerns.

1.11    Q4 Fuel Rustenburg (Pty) Ltd (Q4) / Verco Energy (Pty) Ltd (Verco)

The Commission has unconditionally approved the proposed merger whereby Q4 intends to acquire Verco. 

Q4 is a non-refining wholesaler of petroleum products in South Africa, primarily in the North West, Gauteng, and Mpumalanga provinces. Q4 sells the petroleum products to wholesale clients, retail clients and commercial clients. 

Verco is a non-refining wholesaler of petroleum products in South Africa. Verco’s activities are identical to those of the primary acquiring firm, Q4. However, it operates in the Gauteng, Mpumalanga, and Free Sate provinces. Verco also has one franchisee filling station in Mpumalanga. The franchisee filling station has a convenience store on its premises selling convenience retail products, including but not limited to, snack foods, soft drinks, etc. 

The Commission found that 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 concerns.

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

2.1   Rajpal Somaru v Gorima’s

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

2.2   Lehlohonolo George Mosheshe v Department of Sports, Arts, Culture and Recreation

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

2.3   Tandeka Nosipo Rozani v Tjaard van der Walt – Property Developer Altivex (Pty) Ltd

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

2.4   Katherine Harvey v Beacon SA

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

Avedia Energy (Pty) Ltd v Sunrise Energy (Pty) Ltd, Transnet Group and Transnet National Ports Authority 

The matter was resolved by the Ports Regulator of South Africa.

Theyagaraj Chetty v Porsche South Africa

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

Jack Finn on behalf of Finn Auto Repairs and Diagnostics CC v Volkswagen South Africa 

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

Compliance and Learning Center (Pty) Ltd v Susanna Catherina Dercksen

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

Sphiwe Masuku on behalf of Raxispark (Pty) Ltd v Standard Bank (Business Banking)

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

Waterfall-Crest tenants v Fungi Utilities 

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

Ms Petula Sihlali v Prudential Authority and Financial Conduct Authority

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

Withdrawal of complaints: The Commission has taken a decision to accept the withdrawal of the following complaint

3.1    Jonathan J. Maphanga v BH Du Toit (Wonderpark Body Corporate)

The Commission has taken a decision to accept the withdrawal of this complaint.

3.2    Jacques de Klerk de Villiers v Dr Sadhvir Bissoon and Ms Jodi Scholz SABS 

The Commission has taken a decision to accept the withdrawal of this complaint.

Issued by The Competition Commission of South Afri