competitiontribunal
SOUTH AFRICA
COMPETITION TRIBUNAL OF SOUTH AFRICA
In the matter between:
SPE Mid-Market Fund I Partnership {represented by
the general partner, SPE Mid-Market Fund I General
Partner Proprietary Limited)
and
S Bacher and Company Proprietary Limited
Panel:
Heard on:
Order issued on:
Reasons issued on:
Approval
A Kessery (Presiding Member)
F Tregenna (Tribunal Member)
A Ndoni (Tribunal Member)
19 February 2024
19 February 2024
07 March 2024
REASONS FOR DECISION
Case No: LM158Dec23
Primary Acquiring Firm
Primary Target Firm
[1] On 19 February 2024, the Competition Tribunal ("Tribunal") unconditionally approved the
large merger whereby SPE Mid-Market Fund I Partnership (the "SPE Fund"), represented
by The General Partner, SPE Mid-Market Fund I General Partner Proprietary Limited (the
"SPE Fund General Partner") will acquire ■1o of the issued share capital of S Bacher and
Company Proprietary Limited ("Bacher"). Post-merger, SPE Fund will have sole control
over Bacher.
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Parties to the transaction and their activities
Primary acquiring firm
[2] The primary acquiring firm is the SPE Fund represented by the SPE Fund General Partner,
a private company incorporated in terms of the laws of South Africa. The SPE Fund
operates as a private equity investment firm.
[3] The SPE Fund is managed by Sanlam Investment Management (Pty) Ltd (“Sanlam
Investment Management”), which wholly controls the SPE Fund General Partner. In turn,
Sanlam Investment Management is wholly controlled by Sanlam Investment Holdings (Pty)
Ltd (“Sanlam Investment Holdings”).
[4] Sanlam Investment Holdings is controlled by SIH Capital Holdings (Pty) Ltd (“SIH”) as to
%, with the remaining shareholding held by ABSA Financial Services L td. SIH is
controlled by Sanlam Ltd (“Sanlam”) as to
[5] Sanlam is a company listed on the Johannesburg Stock Exchange (“JSE”) , with a
secondary listing on the Namibia Stock Exchange. Firms with a shareholding greater than
5% in Sanlam include Public Investment Corporation SOC Limited as to 14.21% and
Ubuntu-Botho Investments (Pty) Ltd as to 13.13%.1
[6] Sanlam and its related subsidiaries operate as a financial services group in South Africa
and has further interests globally.
[7] The SPE Fund controls a number of firms in di fferent industries which include meat
production, financial services, property, and vehicle automotive parts, amongst others.
[8] Sanlam, the SPE Fund and all its subsidiaries will be referred to as “the Acquiring Group”.
Primary target firm
[9] The primary target firm is Bacher, a private company incorporated in terms of the laws of
South Africa.
1 As of 31 December 2022.
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[1 0] Bacher does not control any other firm.
[11] Bacher is controlled by Mr Shaun Bacher as to
Shaun Bacher does not control any other firm.
Mr
[12] Bacher is a wholesaler and distributor of branded products which comprise of watches2,
fragrances3, jewellery and cosmetics,4 and food and baby5 products. Bacher's brand
range targets customers at living standard measure ("LSM") 5 - 7 as well as more affluent
LSM 8 - 10 consumers.
[13] Bacher distributes its products nationally to South African retailers including Dis-Chem,
Clicks, Truworths, Foschini, Woolworths and Edgars (in relation to fragrances and
cosmetics) as well as NWJ and Cajees Time Zone (in relation to watches and jewellery).
Products are also distributed to independent retailers and e-commerce channels such as
Takealot, Bash (The Foschini Group) and OneDayOnly.
Proposed transaction and rationale
Transaction
[14] In terms of the Sale of Shares Agreement, the SPE Fund will acquire ■1o of the issued
share capital in Bacher,
Post-merger, the SPE Fund will have sole control over Bacher.
Rationale
[15]
[16] From the target firm's perspective, the controlling shareholder of Bacher, Mr Shaun
Bacher, wishes to realise his investment in Bacher.
2 Branded watches distributed by Bacher include Tomato, Lacoste, Tommy Hilfiger, Scuderia Ferrari and Boss.
3 Bacher holds licence agreements for over 50 fragrance brands. Branded fragrances distributed by Bacher
include Lanvin, Guess, Mont Blanc, Kate Spade, Bently and Dunhill, amongst others.
4 Branded jewellery and cosmetics distributed by Bacher include Guess, Gosh, and Ariana Grande.
5 Branded food and baby products distributed by Bacher include Nanobebe and True Citrus.
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Competition assessment
[17] The Competition Commission ("Commission") considered the activities of the merging
parties and found that no products or services supplied by any portfolio company of the
SPE Fund in South Africa (or elsewhere) are substitutable with the products sold or
services rendered by Bacher. Furthermore, the merging parties do not have any pre
existing relationship, nor do they supply any products or services to each other.
[18] Accordingly, the Commission found that the proposed transaction does not present any
horizontal or vertical overlaps.
[19] Having regard to the above, we are satisfied that the proposed transaction is unlikely to
result in a substantial prevention or lessening of competition in any relevant market.
Public interest assessment
Employment
[20] The merging parties submitted that there will be no retrenchments as a result of the
proposed transaction.
[21] Employee representatives of the merging parties confirmed to the Commission that
employees had raised no concerns with the proposed transaction.
Spread of ownership
[22] According to the Commission, the SPE Fund General Partner and the SPE Fund have a
shareholding by historically disadvantaged persons ("HOP") of __
[23] Prior to the proposed transaction, Bacher has no HOP shareholding.
[24] By virtue of the SPE Fund's-% HOP shareholding and pursuant to its acquisition of
■lo of the issued share capital of Bacher , the proposed transaction will result in Bacher
having a~ HOP shareholding.
[25] Having regard to the above, we are satisfied that the proposed transaction does not raise
any public interest concerns.
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Conclusion
[26) Considering the above, we conclude that the proposed transaction is unlikely to
substantially prevent or lessen competition in any relevant market and does not raise any
public interest concerns.
[27) We therefore approve the proposed merger unconditionally.
Signed by:Anisa Kessery
Signed at:2024-03-07 14:33:12 +02:00
R eason:W itnessing Anisa Kessery
7 March 2024
Date
Prof. Fiona Tregenna and Ms Andiswa Ndoni concurring
Tribunal case manager:
For the merging parties:
For the Commiss ion:
Leila Rattee
Richardt van Rensburg and Tayla Theron of Edward
Nathan Sonnenbergs Inc.
Tarryn Sampson , Raksha Darji and Grashum
Mutizwa
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