Bachique 813 (Pty) Ltd v Tupperwave Holdings SA (LM160Nov20) [2021] ZACT 1 (6 January 2021)

About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Competition Tribunal
SAFLII
>>
Databases
>>
South Africa: Competition Tribunal
>>
2021
>>
[2021] ZACT 1
|

|

Bachique 813 (Pty) Ltd v Tupperwave Holdings SA (LM160Nov20) [2021] ZACT 1 (6 January 2021)

COMPETITTION
TRIBUNAL OF SOUTH AFRICA
Case
No: LM160Nov20
In
the matter between:
Bachique
813 (Pty) Ltd
Primary
Acquiring Firm
And
Tupperware
Holdings SA
Primary Target
Firm
Panel: Ms
M Mazwai (Presiding Member)
Mr
E Daniels (Tribunal Member)
Mr
A Wessels (Tribunal Member)
Heard
on: 18 December 2020
Order
Issued on: 21 December 2020
Reasons
Issued on: 06 January 2021
REASONS
FOR DECISION
APPROVAL
[1] On
18
December
2020,
the
Competition
Tribunal
(“Tribunal”)
approved
the
proposed
transaction whereby Bachique 813 (Pty) Ltd (“Bachique”) intends
to
acquire
100% of the issued share capital of Tupperware Holdings SA (Pty) Ltd
(“Tupperware
Holdings”).
[2] The
reasons
for the
unconditional
approval
follow.
PARTIES
TO
THE
TRANSACTION
Primary
Acquiring
Firm
[3]
The
primary
acquiring
firm
is
Bachique,
a
newly
incorporated
company
established
for
the purpose of this transaction. Bachique is jointly controlled by
Trinitas Equity
Partners
(Pty)
Ltd
(Trinitas)
[...] and
Forbes
Investment
Holdings
(Pty)
Ltd
(FIH)
[…]. The remaining [...]
of
the shares in Bachique are held by Justin Hewett,
the
Chief
Executive
Officer of
Bachique.
[4] Bachique
does not control any firms. Post-merger, Trinitas and FIH will
jointly
control
Bachique through minority protection and veto rights. Trinitas does
not
control
any firm except Bachique. However, Trinitas holds interest in
Trinitas
Private
Equity
Partnership
with
a
portfolio
of
investment
in
numerous
firms,
relevant
to
the transaction is the interest held in Main Street Holdings (Pty)
Ltd which
controls
Sunpac
(Pty)
Ltd
(“Sunpac”).
FIH
is
wholly
owned
by
Hilcona
Holdings
Ltd,
a
firm
incorporated
in
the
British
Virgin
Islands.
In
South
Africa,
FIH
control
various
firms.
[5] Bachique
has no business activities. The business activities of the firms
which
Trinitas
and FIH control range from manufacturing and distribution of
automotive
products
and commercial property investment.
[6] The
activities of Sunpac, held by Main Street Holding are of most
relevance to the
proposed
transaction.
Sunpac
is
a
distributor
of
branded
and
private
label
cosmetic,
oral care, haberdashery and baby products to South African retailers.
Sunpac
is an exclusive distributor of the international brands in South
Africa with
the
main
focus of
its
distribution on
hair
care products.
Primary
Target Firm
[7] The
target firm is Tupperware Holdings SA, a private company incorporated
in
South
Africa. Tupperware Holdings SA controls
Avroy
Shlain Cosmetics (Pty) Ltd
(ASC)
and
Avroy
Shlain
Cosmetics
(Botswana)
(Pty)
Ltd.
Tupperware
Holdings
SA
controls
Avroy
Shlain
Cosmetics
(Botswana)
(Pty)
Ltd
through
its
controlling
shareholding
in
ASC.
Tupperware
Holdings
SA
is
ultimately
controlled
by
Tupperware
Brands Corporation (U.S). Tupperware Brands Corporation (U.S)
holds
its
plastic
products
business
separately
through
Tupperware
Southern
Africa
(Pty)
Ltd (South Africa).
[8] Tupperware
Southern Africa (Pty) Ltd (South Africa) does not form part of the
proposed
transaction as it is not part of the target firms. Essentially, the
only
business
of
relevance
to this transaction is ASC.
[9] ASC
develops, markets and supplies its own range of products that
includes
fragrances
for men and women, colour cosmetics, skin, body and ethnic hair care
products
and fashion accessories (handbags, scarfs and travel bags).
These
products
are sold through beauty advisors to
the
end customer.
PROPOSED
TRANSACTION
[10] Bachique
will acquire 100% of the issued share capital of Tupperware Holdings
SA.
Upon implementation of the proposed transaction, Tupperware Holdings
SA
and
all
firms
directly
or indirectly controlled
by
it will be
controlled
by
Bachique.
Rationale
[11] The
acquiring firm is looking to expand its investment portfolio and has
identified
the
target firm as an attractive investment opportunity to diversify and
grow.
In
relation
to the target firm, Tupperware Brands Corporation Group is looking to
change
its strategy and through this transaction the Tupperware Brand
intends to
dispose
of its beauty businesses and focus its attention on its core business
( i.e.,
kitchen
and
household
products,
particularly
plastic
containers
for
food
storage
and
preparation).
COMPETITION
ANALYSIS
[12] The
Commission found that the proposed transaction results in an overlap
as
Sunpac
and ASC operate in the broad market for manufacturing and supply of
beauty
and personal care products. Although Sunpac and ASC operate in the
same
market, the Commission found that Sunpac generates its revenue mainly
from
the
sale
of
hair
care
products
while
ASC
generates
its
revenue
mainly
from
the
sale
of
fragrances.
As
such,
the
Commission
found
Sunpac
and
ASC
to
unlikely
be
each
other’s closest
competitors.
[13] The
Commission evaluated the effects of the proposed transaction in the
national
market
as
both
Sunpac
and
ASC
supply
their
products
nationally.
[14] The
Commission assessed the market shares of the merging parties both
broadly
for
the
sale
of
beauty
and
personal
care
products
and
narrowly
for
each
product
segment.
It
found
that
Sunpac
and
ASC
each
held
market
shares
in
the
broad
market
for
beauty
and
personal
care
products
below
1%
in
2019
and
will
thus
have a combined market share of less than 2% post-merger in South
Africa.
The
Commission
identified
30
market
participants
in
the
national
market
that
the merging parties will continue to face competition from.
These
market
rivals
include
Unilever,
Avon
Justine,
Revlon,
L,Oréal,
Indigo
Brands,
Procter
&
Gamble
and Colgate-Palmolive, amongst
others.
[15] Furthermore,
when the Commission assessed the merging parties’ market
shares
based on the total sales in each product category (narrow product
markets,
comprising fragrances, hair care products, skin care products and
colour
cosmetics respectively), the Commission found that the merging
parties
will
have
a
combined
market
share
of
less
than
5%
post-merger
in
each
product
category.
[16] Therefore,
the
Commission
was
of
the
view
that
the
merger
is
unlikely
to
result
in
any
competition
concerns
as there are numerous
competitors
who will
continue
to constrain the merged entity post-merger. We found no reason to
differ
from
this.
PUBLIC
INTEREST
[17] The
proposed transaction does not result in any public interest concerns.
There
will
be a change in the senior executive management whereby the existing
Chief
Executive
Officer/Managing Director of ASC will exit the business and will be
replaced
by
the
previous
Managing
Director
of
ASC,
Justin
Hewett
who
previously
held
the
position from 2009 to 2014.
[18] Apart
from this change, there are no retrenchments of employees envisaged
as a
result
of
the
proposed transaction.
CONCLUSION
[19] Based
on
the
above,
we
are
of
the
view
that
the
proposed
transaction
is
unlikely
to
substantially
prevent
or
lessen
competition
in
any
of
the
relevant
markets.
Furthermore,
the
proposed
transaction
does
not
raise
any
public
interest
concerns.
We
therefore
unconditionally
approved the
transaction.
06
January 2021
Ms
Mondo Mazwai Date
Mr
Enver
Daniels
and
Mr
Andreas
Wessels
Tribunal
Case Managers: Lumkisa Jordan and Mpumi Tshabalala
For
the merging parties: Mark Garden for ENS Africa
For
the Commission: Themba Mahlangu and Raksha Darji