1
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: LM109Oct24
In the matter between:
Cp Spruce Holdings, S.C.SP
Primary Acquiring Firm
and
The Kidney Care Segment of Baxter
International Inc. known as Vantive
Primary Target Firm
Panel: I Valodia (Presiding Member)
A Ndoni (Tribunal Member)
G Budlender (Tribunal Member)
Heard on: 17 January 2025
Decided on: 17 January 2025
Reasons issued on: 30 January 2025
REASONS FOR DECISION
Introduction
[1] On 17 January 2025, conditionally
approved a large merger in which CP Spruce Holdings S.C Sp CP Spruce
intends to acquire segment
known as Vantive. Post-merger CP Spruce will exercise sole control over
Baxter.
Parties to the transaction and their activities
Primary acquiring firm
[2] The primary acquiring firm is CP Spruce. CP Spruce is a special limited
partnership and incorporated in accordance with the laws of Luxembourg.
2
[3] CP Spruce is represented by its managing general partner CP VII Spruce GP A
. CP VII is a private limited liability company based in Luxembourg.
[4] CP VII is indirectly controlle Carlyle .
Carlyle is listed on the NASDAQ stock exchange and its shares are widely held
and thus are not controlled by any firm or person.
[5]
[6] The acquiring firm and the firms it controls are collectively referred to as the
Group .
Primary target firm
[7] The primary target firm is the kidney care segment of Baxter which is known as
Vantive.1 Baxter is incorporated in accordance with the laws of the United States
of America.
[8] Vantive is primarily active in the supply of renal replacement therapy (RRT)
products. RRT products are used to treat patients suffering from End- Stage
Renal Diseases (ESRD).
[9] Vantive does not have any operations or entities incorporated in South Africa
and only derives turnover from the sales of its RRT products in South Africa.
[10] The target firm and the firms controlled by the Target Firm will be collectively
referred to as the
1
5
20.5.
[21] The Commission considered the correspondence submitted by both the merging
parties and and found that the dispute between the parties are primarily
contractual in nature, which is beyond the scope of the Act. However, the
Commission notes the consequences that this would have on the end RRT
consumer and inevitably public and private healthcare in relation to access to
RRT. Based on this, the Commission accepted the conditions proposed by the
merging parties and agreed to by
Public interest assessment
Employment
[22] The merging parties confirmed that the proposed transaction will not have any
adverse impact on employment. In particular, there will be no retrenchments or
job losses that will arise from the proposed transaction.
[23] In light of the above, there are no employment concerns arising from the
proposed transaction.
Promotion of a greater spread of ownership
[24] Neither the Acquiring Group nor Target Group has any shareholding held by
HDPs. The Commission requested the merger parties to consider ownership
remedies such as
transaction and to propose other equally weighty remedies that adequately
countervail the lack of promotion of ownership by HDPs or workers, to the extent
that ownership remedies are not implementable.
6
[25]
neither ownership nor any other alternative remedies are warranted in the
circumstances of the proposed transaction. In this regard, the merging parties
indicated that both the Acquiring Group and Target Group do not have any
subsidiaries, branches, offices or production activities in South Africa.
Vantive is only active in South Africa through the sale of RRT products to
a third-party level 1 BBBEE contributor and 29% shareholding held by
HDPs.
[26] The merging parties further submitted that
turnover derived from South Africa. Based on the above, the merging parties
submitted that the Proposed Transaction is a foreign-to-foreign transaction with
only a tangential link to South Africa.
[27] The Commission noted the circumstances of the instant transaction. The
Commission particularly note that the merging parties are based in Luxembourg
and the United States of America and do not have any local production
operations or employees in South Africa. The Acquiring Group is only present in
South Africa through its investment portfolios (by virtue of the funds invested by
the Acquiring Group). Considering the above the Commission found that that no
further intervention was required in the circumstances.
[28] In light of the commitments, we conclude that the proposed merger raises no
significant concerns regarding the spread of ownership.