Weekly Media Statement 03 May 2019 Final

Transcript

1 Weekly Media Statement For Immediate Release 0 3 May 2019 LATEST DECISIONS BY THE COMPETITION COMMISSION S K2019054975 (South Africa) (Pty) Ltd ( 1.1 NewCo ) v Lowveld Bus Service business of Buthotis Trading (Pty) Ltd (Pty) Ltd ( LBS ) intends to The Commission has approved, with out conditions, the proposed merger whereby NewCo . LBS acquire NewCo is a newly established firm that does not conduct any business activities. The firms controlling logistics solutions, which include road freight and transport, managed NewCo are active in the provision of logistics warehousing and distribution, supply chain integration and market fulfilment route - to - (“Acquiring Group”) . Of particular relevance to this merger assessment, is the Acquiring Group’s passenger bus transportation activities which are conducted to the Free State Province. LBS operates a passenger bus service withi n and around the town of Lephalale in the Limpopo Province. The Commission found that the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in any market. The Commission further found that the proposed tran saction does not raise any employment or other public interest concerns. 1.2 Uhambo Property ) v Stoney Meadows Stoney Meadows Investment 11 (Pty) Ltd ( Investment (Pty) Ltd ( Uhambo ) The Commission has approved, without conditions, the proposed merger whereby Stoney Meadows intends to acquire Uhambo. Stoney Meadows invests in properties and listed shares and receives rental income from its property investments and dividends income fro m its shareholding, respectively. . competition regulation for a growing and inclusive economy

2 2 Uhambo’s business consists of a grape farm. The farm conducts vineyard cultivating and grape harvesting. The business sells its grapes to a single customer in Stellenbosch. ion is unlikely to result in a substantial prevention or The Commission found that the proposed transact lessening of competition in the relevant markets. The Commission further found that the proposed transaction does not raise any public interest concerns. ) Capitec 1.3 Capitec Bank Limited ( ) v Mercantile Bank Holdings Limited ( MBHL The Commission has recommended to Tribunal that the proposed merger, whereby Capitec intends to acquire MBHL, be approved, without conditions. Capitec operates as a retail bank, and although it also offers a limite d range of business services, it does not provide business banking services to entities such as SME’s, close corporations, companies, partnerships and trusts. Capitec offers transactional accounts, savings plans, insurance plans and credit loans and credit cards. In addition, Capitec also provides forex services and merchant options such as services. MBHL is a registered bank which provides business banking services to customers throughout South Africa. MBHL’s banking serv bo rrowing solutions, investment solutions (call ices includes, amongst others, accounts, notice and fixed deposits and money market accounts) and insurance solutions. The Commission found that the proposed transaction is unlikely to result in a substantial prevention or lessening of com petition in the relevant markets. The Commission further found that the proposed transaction does not raise any public interest concerns. ) v Cartrack Holdings Limited 1.4 Karoo Private Limited ( Karoo ) ( Cartrack The Commission has approved, the proposed merger, without conditions, whereby Karoo intends to acquire Cartrack. Karoo does not have any business activities in South Africa. ation Cartrack is a provider of solutions for mobile asset management, asset recovery workforce optimis and data analytics based on a proven telematics platform. Fleet management, tracking and recovery of vehicles and insurance telematics services remain Cartracks primary offerings.

3 3 is unlikely to result in a substantial prevention or The Commission found that the proposed transaction lessening of competition in any relevant market. The Commission further found that the proposed transaction does not raise any employment or other public interest concerns. Sima Chrome (Pty) Ltd 1.5 SIMA ) v Bhaphalane Siyanda Chrome Company (Pty) Ltd ( BSCC ) ( The Commission has approved, the proposed merger, without conditions, whereby SIMA intends to acquire . BSCC SIMA invests in platinum group metals, chrome, base metals (manganese), energy (coal, urani um, oil, gas) and industrials. The products sold by the SIMA include metallurgical, chemical and foundry grade chrome. and is jointly BSCC is an investment holding company which is invested in various mining activities controlled by SIMA pre - merger. 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 employment or public int erest concerns. Barrows Design and Manufacturing (Pty) Ltd Barrows Khula (Pty) Ltd ( BK ) v 1.6 (BDM ) in respect of its retail corrugate display design and manufacture business ( Target Business ) intends to acquire The Commission has approved, the proposed merger, without conditions, whereby BK from BDM . the Target Business BK, through its subsidiaries, provides a number of products and services which include , private equity investment; real estate development and management services. The Target Business is the corrugate display manufacturing division of BDM and provides various services in respect of corrugate (cardboard) display products, and operates in broad markets that include, design, prototype, and manufacturing . 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 aise any employment or public interest concerns. transaction does not r

4 4 1.7 Edgar s acquisition approved with conditions en a decision to recommend to the Competition Tribunal (Tribunal) that the The Commission has tak proposed acquisition of Edgars Consolidated Stores Limited (ECSL) by New HoldCo (New HoldCo) be approved subject to conditions. The Commission found that the proposed transaction w as unlikely to result in a substantial prevention or lessening of competition in the relevant markets. The proposed transaction seeks to mitigate the dire financial position the Edcon Group finds itself in and avoids potential liquidation which may result in job losses. The Edcon Group and the Economic Development Department (EDD) had agreed upon certain conditions aimed at promoting BEE, local procurement and preserving employment and the Commission has recommended that the merger is approved subject to s uch conditions. Competition Commissioner, Tembinkosi Bonakele says: “The Commission believes that the proposed transaction will have an overall positive effect on employment, particular on the retail industrial sector Edcon Group. The group intends to employ additional because it seeks to preserve the job levels within the staff in the future. A significant number of Edcon employees could lose their employment were the business to be placed under business rescue proceedings if the acquisition is not approved.” The condit ions are a culmination of the merging parties and the EDD agreeing that the proposed transaction be approved subject to conditions substantively similar to those in Parentco/Edcon merger in 2016. New HoldCo is a shelf company with no previous operations o r activities in South Africa that has been established for the purposes of acquiring the entire issued share capital of the Edcon Group. ECSL controls Edcon Limited (Edcon) and, in turn, Edcon is controlled by Parentco. For the sake of convenience, ECSL, E dcon and all their subsidiaries are referred to as the Edcon Group. The Edcon Group is active in the retail of apparel through various divisions, which sell men’s, women’s and children’s wear, fragrances, cosmetic products, home wares and cellular product s. The shareholders of New HoldCo comprise of local and international financial investors in the form of private equity investments firms and banks. None of the shareholders conduct any clothing retail activities. rcise any form of control over New HoldCo. None of the shareholders of New HoldCo exe

5 5 B ackground The proposed transaction follows a failed attempt to restructure the Edcon Group in 2016. The previous restructuring transaction involved a consortium of creditors, “Parentco” which sought to acquire the entire issued share capital of Edcon Group (Parentco/Edcon). The Commission recommended an unconditional approval of Parentco/Edcon merger, however, the the Tribunal approved the merger subject to public interest conditions that had been agreed to between EDD and the merging parties. The Parentco conditions required Edcon Group to, amongst other things, use its best endeavours to avoid job losses, increase procurement from local suppliers and maintain BEE participation. Since the implementation of th e Parentco/Edcon merger, the Edcon Group has provided the Commission and the EDD with periodic updates regarding Edcon Group’s financial challenges. - refer (not to prosecute) the 2 Non Referrals: The Commission has taken a decision to non following cases: 2.1 v Matus (Pty) Ltd Luntu Mnembe The Commission is of the view that the conduct complained of does not contravene the Competition Act Freedom Samsung/ IP Group v 2.2 ISP Solution T/A Johan Nagel The Commission is of the view that the conduct complained of does not contravene the Competition Act [ENDS] Issued by: Sipho Ngwema, Head of Communications On behalf of: The Competition Commission of South Africa Tel: 012 394 3493 / 081 253 8889 Email: [email protected] Find us on the following social media platforms: Twitter: @CompComSA gram: Competition Commission SA Insta The Competition Commission South Africa Facebook, Linkedin and YouTube:

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