competitiontribunal
SOUTH AFR ICA
COMPETITION TRIBUNAL OF SOUTH AFRICA
Ca se no: LM124Nov23
In the large merger between:
K2023647843 (South Africa) Proprietary Limited
And
Mayfair Gearbox Holding Company Proprietary
Limited
Primary Acquiring Firm
Primary Target Firms
Panel:
Heard on:
Thando Vilakazi (Presiding Member )
And isw a Ndon i (Tribunal Panel Membe r)
Geoff Budlender (Tribunal Panel Member
21 December 2023
Order issued on: 21 December 2023
Reasons Issued on: 17 January 2024
REASONS FOR DECISION
Introduction
[1] On 21 December 2023, the Compe tition Tribunal ("Tribunal") unconditionally
approved the large merger between 1<2023647843 (South Africa) Proprietary
Limited ("SPE BidCo ") and Mayfair Gearbox Ho ldings Company Proprietary
Limited ("Mayfair"). The large merger envisages the acquisition of ■% of the
issued shares of Mayfair by SPE BidCo .
Merging parties
Acquiring firm
1
[2] The primary acquiring firm is SPE BidCo. SPE BidCo is controlled by SPE M id
Market Fund I Partnership ("SPE Fund") represented by the general partner,
SPE M id-Market Fund I General Partner Proprietary Limited ("SPE Fund
General Partner") h o s ■( t e i d sh s. T e la o h
issued shares is held by w ho holds ■%.
[3] SPE Fund is managed , and the SPE Fund General Partner is 100% controlled,
by Sanlam Investment Management Proprietary Limited ("Sanlam Investment
Management "). Sanlam Investment Management is w holly ow ned by Sanlam
Investment Holdings Proprietary Limited ("Sanlam Investment Holdings").
[4] Sa la In e t ol n s s ntro e s - % b S H C i a o s
Proprietary Limited ("SIH Capital Holdings")1 SIH Cap ital Holdings is controlled
(a t ■< n L t d 2 Sanlam Limited is a listed public company and
is not controlled by any firm/s.3
[5] All the firms directly or indirectly controlled by SIH Capital Holdings are
hereinafter referred to as the "Acquiring Group".
Acquiring firm activities
[6] The Acquiring Group's activities, w hich are material to the proposed merger, are
conducted through Danny's Auto Body Parts Proprietary Limited
("Danny's Auto") and Danny's Auto Property Holdings Proprietary Limited
("Danny's Auto Property"). Danny's Auto is a w holesaler of aftermarket
automotive parts and accessories for know n brands. Danny's Auto also
distributes a portfolio of unbranded products to both w holesalers and retailers.
Danny's Auto Property on the other hand is a property holding company and
does not conduct any business activities. Danny's Auto Property ow ns the
property on w hich Danny's Auto conducts its business.
1 ASSA Financial Services Limited ow ns the remaining non-controlling-% of the issued shares in
San lam Investment Holdings.
2 AR C Financial Services Investments Proprietary Lim ited ow ns the rema ining non-controll ing■% of
the issued shares in SIH C apital Holdings.
3 San lam is a public compan y listed on the Johannesburg Stock Exchange in South Africa, w ith a
secondary listing on the Nam ibian Stock Exchange in Nam ibia. As at 31 December 2022, firms
holding a beneficial shareholding in Sanlam of 5% or more w ere: (i) Ubuntu-Botho Investments
Proprietary Limited (13.13%); and Government Employees Pens ion Fund (PIC) (14.21%) .
2
[7] The Acquiring Group is also active in the market for the provision of financial
services through Sanlam. The financial services include short and long-term
insurance, employees' benefits, private equity, and investments.
Target firm
[8] The primary target firm is Mayfair. Mayfair is controlled by M ichael Law lor w ho
h Id ■% f h e re h I ce o a Id -
w hich holds ■% of the issued shares.
[9] Mayfair controls the follow ing w holly ow ned firms:
9.1. Mayfair Gearbox Proprietary Limited;
9.2. Mayfair Gearbox Pretoria Proprietary Limited;
9.3. Mayfair Gearbox Automatic Transmissions Proprietary Limited;
9.4. Mayfair Gearbox & Differential Proprietary Limited; and
9.5. Mayfair Ma intenance Fleet Proprietary Limited.
[1 O] Mayfair and all its subsidiaries are referred to hereafter as the "Mayfair Group".
Target firm activities
[11] The Mayfair Group remanufactures and repairs gearboxes for manual and
automatic passenger vehicles, light and heavy commercial vehicles as w ell as
earthmoving and m ining mach inery. Mayfair also has a fleet business, w hich
provides maintenance and repairs for customers w ith large corporate fleets.
Proposed transaction and rationale
Transaction
[12] In erms o he ro ose t sa , p 8 i t nd
issued shares of Mayfair from M ichael Law lor. Upon implementation of the
proposed transaction, SP E BidCo w ill exercise sole control of Mayfair.
Rationale
[13]
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Competition assessment
[14] In line w ith the Comm ission's recommendation and having considered the
activities of the merging parties w e find that the proposed transaction w ill not
lead to vertical or horizontal overlaps.
[15] The Acquiring Group, through Danny's Auto, neither remanufactures nor
distributes gearboxes, and it has no plans to do so in future. In addition, the
merging parties do not provide products or services to each other nor do they
service the same type of customers.
Public interest assessment
Effect on Emp loyment
[16] The merging parties provided an unequivocal undertaking that there w ill be no
retrenchments or redundancies as a result of the proposed transaction.
[17] The employees of the Acquiring Group w ere represented by an employee
representative. The employees of Mayfair w ere represented by the Motor
Industry Bargaining Co uncil, the National Union of Metalw orkers of South Africa,
and the Motor Industry Staff Association ("M ISA ").
[18] MISA filed a notice of participation in the proposed transaction. MISA sought
confirmation that the current emp loymen t contracts w ill remain in place and that
no employee w ill be affected in any w ay. The merging parties provided the
requested confirmation, and no further concerns w ere raised.
Effect on the spread of ownership
[19] The yfai G sha ho d g el H cal y
D isadvantaged Per , SP E Bidco has-
% shareholding held by
4
HD Ps. As such, the transaction results in an increase in the shareholding held
by HDPs in the target firm.
[20] Based on the above facts, w e conclude that the proposed transaction does not
raise any significant public interest concerns.
Conclusion
[21] For the reasons set out above, w e conclude that the proposed transaction does
not raise any significant competition or public interest concerns, and therefore
approve the proposed transaction unconditionally.
Sia••~·"'"'l'III-~ aaNO r.:10!2,l,4,.,f l1'».$>-«tOO
··---... -.,-~
Prof. Thando Vilakazi
17 January 2024
Date
Concurring: Adv Geoff Budlender SC and Ms Andiswa Ndoni
Tribunal Case Manager:
For the Merging Parties:
For the Comm ission:
Bobed i Seleke
R ichardt van Rensburg and Tayla Theron of
ENS Africa
Nonhlanhla Msiza and Themba Mahlangu
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