1
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case no: LM116OCT24
In the large merger between:
Campobelo Investments, S.L. Primary Acquiring Firm
And
Seidor Solutions, S.L. and Seidor Logistics, S.L. Primary Target Firms
Panel: I Valodia (Presiding Member)
A Ndoni (Tribunal Member)
G Budlender (Tribunal Member)
Heard on: 31 January 2025
Order issued on: 31 January 2025
Reasons Issued on: 25 February 2025
REASONS FOR DECISION
Introduction
[1] On 31 January 2025, the Competition Tribunal (“Tribunal”) conditionally
approved the large merger whereby Campobelo Investments, S.L.
(“Campobelo”) intends to acquire 100% of the shares in Seidor Solutions, S.L.
and Seidor Logistics S.L. (collectively referred to as the “Target Firms”). Post-
merger, Campobelo will exercise sole control over the Target Firms.
Parties to the transaction and their activities
Primary acquiring firm
[2] The primary acquiring firm Campobelo, a newly incorporated investment vehicle,
is incorporated in accordance with the laws of Spain. Campobelo is ultimately
controlled by the Carlyle Group Inc. (“Carlyle”). Carlyle is listed on the NASDAQ
stock exchange and its shares are widely held. It is not controlled by any person
3
computer software, programming and technical assistance, (ii) the
commercialization, installation, repair and maintenance of computer hardware
and auxiliary materials and (iii) the provision of IT services, including consulting
services.
[10] In South Africa, the Target Group provides IT consulting services including: (i)
business intelligence consulting (“BI”) and products which are mostly Microsoft
and SAP related, (ii) end-to-end SAP enterprise resource planning (“ERP”)
services which is software which helps businesses manage and automate their
core processes, and (iii) IP and manged servicer provider related services and
support to SAP and non-SP clients. The Target Firms do not develop the IT
solutions offered by IT vendors but connect customers with IT software providers
by availing a portfolio of IT services that integrates the offerings.
Description of the transaction and rationale
[11] In terms of the proposed merger, Campobelo intends to acquire 100% of the
shares in the Target Firms. Upon implementation of the proposed merger,
Campobelo will exercise sole control over the Target Firms.
[12] In relation to the rationale for the proposed merger, the Acquiring Group views
the proposed merger as an investment opportunity.
Competition assessment
[13] The Competition Commission (“Commission”) considered the activities of the
merging parties and found that the proposed merger results in a horizontal
overlap as both the merging parties are active in the provision of IT consulting
services in South Africa. The Commission thus assessed the overlap in the
national market for the provision of IT consulting services.
3 Paragraph 5 of the merging parties joint competitiveness report submitted together with the merger
filing.
4
Horizontal competition assessment in the national market for the provision of IT
consulting services
[14] The Commission noted that market share information is not readily available and
on this basis relied on the merging parties’ market share estimates.
[15] The Commission found that post-merger the merged entity will have an
estimated market share of approximately with an accretion of in the
national market for the provision of IT consulting services. The Commission
further noted that the market for the provision of IT consulting services is
fragmented with several players active in the market including Ernst & Young,
NTT Data, Minsait, Deloitte, Accenture, Price Waterhouse Coopers, Kyndryl,
Bain, Concentrix, McKinsey, KPMG, WNS, Tech Mahindra, and IBM Consulting.4
[16] Based on the above, the Commission found that the proposed merger is unlikely
to result in the substantial prevention or lessening of competition in the provision
of IT consulting services in South Africa.
Vertical assessment
[17] The Commission further found that the proposed merger results in a vertical
overlap in that the Target Firms integrate the Acquiring Group’s enterprise
content management solutions into its broader IT services.
[18] The Commission found that the vertical overlap arises in the European Union as
is not active in South Africa. On this basis, the Commission did not
assess the vertical overlap.
[19] Based on the above, we are of the view that the proposed merger is unlikely to
result in the substantial prevention or lessening of competition in the relevant
market.
4 Paragraph 23 of the Commission’s Recommendation.
5 Paragraph 17 of the Commission’s Recommendation.
5
Public interest
Employment
[20] The merging parties submitted that “there will be no negative effect on
employment as a result of the proposed transaction”.6
[21] The merging parties submit that the Acquiring Group does not have employees
in South Africa. The employees of the Target Firms did not raise any concerns.7
[22] Considering the above, we are of the view that the proposed merger is unlikely
to have a negative impact on employment.
Promotion of a greater spread of ownership
[23] Neither the Acquiring Group nor the Target Firms have any shareholding held by
historically disadvantaged persons (“HDPs”).
[24] In light of the above, the Commission requested the merging parties to tender
remedies that are responsive to section 12A(3)(e) of the Competition Act 89 of
1998, as amended (the “Act”) or equally weighty remedies that countervail the
lack of promotion of ownership. 8 In response, the merging parties tendered a
condition related to the establishment of a bursary scheme to the value of
for to the benefit of HDP candidates for training and
development in the IT sector. The bursary scheme aims to target HDP
candidates who are enrolled at historically black universities (“HBUs”) (“Bursary
Scheme Commitment”).9
[25] At the hearing held on 31 January 2025, we requested the Commission and
merging parties to make submissions related to the commitment agreed upon,
as well as the public interest issues related to the proposed merger.10
6 Schedules to Form CC4(1) submitted by the merging parties.
7 Paragraph 27 of the Commission’s Recommendation.
8 Paragraph 29 of the Commission’s Recommendation.
9 Historically black university in South Africa includes universities such as University of Venda;
University of Fort Hare; University of Limpopo; University of Western Cape and/or Walter Sisulu
University.
10 Hearing Transcript dated 31 January 2025 page 1, lines 14 - 18.
6
[26] The Commission submitted that the proposed merger was not responsive to
section 12A(3)(e) of the Act given that neither party had any shareholding by
HDPs.11
[27] The merging parties submitted that they did not concede that the proposed
merger is a transaction that warrants any conditions and further did not
acknowledge that there was a public interest effect which required to be
addressed.12 The merging parties further submitted that the proposed merger is
a global transaction and that the Bursary Scheme Commitment was tendered in
order to reach an agreement with the Commission to gain an expedited clearance
by the end of 2024.13 The merging parties view the Bursary Scheme Commitment
as a condition which would result in public interest benefits and would facilitate
the participation of HDPs in the IT industry in South Africa.14
[28] We enquired whether the Commission is of the view that merger transactions
should be justifiable on public interest grounds in instances where a merger
transaction is neutral and does not itself trigger negative consequences. 15 The
Commission submitted that the proposed merger is not neutral from a public
interest perspective and that by its interpretation section 12A(3)(e) triggers a
positive obligation.16 The Commission submitted that in terms of its interpretation
of section 12A(3)(e), informed by the preamble of the Act, a remedy is required
in instances where a merger does not promote ownership by workers or HDPs.17
The Commission additionally submitted that the proposed merger is an
international transaction where there is a limited nexus to South Africa and in this
instance, the Commission did not insist on primary ownership remedies and
accepted the Bursary Scheme Commitment tendered by the merging parties as
an alternative remedy which falls under section 12A(3)(c) of the Act.18
11 Hearing Transcript dated 31 January 2025 page 2, lines 9 - 13.
12 Hearing Transcript dated 31 January 2025 page 3, lines 16 – 19.
12 Hearing Transcript dated 31 January 2025 page 3, lines 16 – 19.
13 Hearing Transcript dated 31 January 2025 page 4, lines 16 - 21 and page 5, lines 1 - 5.
14 Hearing Transcript dated 31 January 2025 page 4, lines 5 – 10 and page 29, lines 12 -14.
15 Hearing Transcript dated 31 January 2025 page 5, lines 7 - 11.
16 Hearing Transcript dated 31 January 2025 page 5, lines 16 – 17, page 5, lines 17 - 20 and page 6,
lines 5 - 9.
17 Hearing Transcript dated 31 January 2025 page 6, lines 2 – 3 and page 10, lines 4 - 6.
18 The Commission further explained that the remedy falls under section 12A(3)(c) because the Bursary
Scheme Commitment will result in skills development that will equip HDPs to participate in the market.
Hearing Transcript dated 31 January 2025 page 8, lines 1 – 8.
8
Tribunal Case Manager: Tarryn Sampson
For the Merging Parties: Heather Irvine and Disebo Leokaoke of Bowman
Gilfillan
For the Commission: Nonhlanhla Msiza and Wiri Gumbie