COMPETITION TRIBUNAL
REPUBLIC OF SOUTH AFRICA
Case No: 49/LM/Sep01
In the large merger between
AMB Holdings Ltd
and
AMB Private Equity Partners Ltd
REASONS FOR THE TRIBUNAL’S DECISION
Approval
The Competition Tribunal issued a Merger Clearance Certificate on 2 November 2001
approving the merger between AMB Holdings Ltd and AMB Private Equity Partners Ltd
(“AMB Paartners”) without conditions. The reasons for approving the merger are set out
below.
The Transaction
AMB Holdings intends to increase its shareholding in AMB Partners from 29.69% to
50% by purchasing shares in AMB Partners on an ongoing basis, thereby gaining control
of the target company.
AMB Holdings indicated that the reasons for the transaction were, inter alia , that certain
of the major unit holders in AMB Partners were concerned about the continuing discount
at which the units traded to the underlying net asset value of AMB Partners. The
repurchasing of the shares will provide those who wish to sell their shares in AMB
Partners the opportunity to do so while simultaneously creating liquidity, which in turn
should result in a higher unit price. The parties hope that this will address the concerns of
unit holders regarding the discount at which the unit currently trades. AMB Holdings also
wishes to increase its share holding because it has identified private equity as an area for
future growth.
The Parties
AMB Holdings is a holding company, which provides banking and nonbanking services
through its subsidiary companies.
AMB Partners who is managed by AMB Capital Management Ltd is involved in private
equity and was listed in the Private Equity Funds sector of the JSE in May 1999. Its
largest shareholders are AMB Holdings Ltd, Nedcor Nominees, Standard Bank
Nominees, CMB Nominees and Iscor Pension Fund. None of the shareholders currently
control AMB Partners.
Evaluating the merger transaction
There are no products or services that are substitutable between the two companies. AMB
Holdings provides various financial services, through its subsidiaries, in the form of
banking and nonbanking (i.e. advisory) activities while AMB Partners is involved in
private equity and invests, through a fund, capital on behalf of its shareholders.
The transaction will, therefore, not affect competition substantially.
Public Interest
None of the public interest grounds are affected by the acquisition.
19 November
2001
D. Lewis Date
Concurring: N. Manoim and D. Terblanche
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