COMPETITION TRIBUNAL REPUBLIC OF SOUTH AFRICA
Case No: 63/LM/Nov01
In the large merger between:
Imperial Holdings Limited
and
Magnis Pretoria (Pty) Ltd
Reasons for the Competition Tribunal’s decision
Approval
The Competition Tribunal issued a Merger Clearance Certificate on 14 December 2001 approving
without conditions the merger between Imperial Holdings Limited and Magnis Pretoria (Pty) Ltd.
The reasons for our decision to approve the merger are set out below.
The Merger Transaction
Intercity Motors (Pty) Ltd, a wholly owned subsidiary of Imperial Holdings Limited (“Imperial”), is
acquiring assets and shares of Magnis Pretoria (Pty) Ltd (“Magnis”). Magnis is a fully owned
subsidiary of Beehive Investment (Pty) Ltd, which in turn is wholly owned by Nedcor Bank
Limited.
Nedcor is selling Magnis because it is not part of its core business.
Evaluating the Merger
The relevant market
Both Imperial and Magnis conducts businesses as dealers of passenger and commercial vehicles. Although
Imperial has dealerships all over South Africa the geographic market is Pretoria/Centurion because Magnis only
trades in the Pretoria/Centurion1.
The following table sets out the dealerships both parties have in the Pretoria/Centurion area:
PRODUCT IMPERIAL MAGNIS
Passenger vehicles dealerships in Pretoria Fiat Fiat
Nissan Nissan
Renault -
Kia -
Hyundai -
Light Commercial Vehicle dealerships in Pretoria Nissan Nissan
Fiat
Medium Commercial Vehicles dealerships in Pretoria - Nissan
- -
- -
1
Heavy Commercial Vehicle dealerships in Pretoria - Nissan
- Renault
It is only in the sale of passenger vehicles and light commercial vehicles where products of the
merging parties overlap.
Both parties are also involved in the forklift market. Imperial only rents forklifts and Magnis only sells forklifts.
Since these are regarded as different markets2there are no product overlap in the forklift market.
Imperial and Magnis’ share of the passenger vehicle market in Pretoria/Centurion are as follows:
Category A&B (entry level cars): 3.95%
Category C (small cars):
4.11%
Category D (middle
cars): 0.48%
Category E (large cars):
0.58%
Luxury Category: 12.47%
The merged party will have a total market share of approximately 20% of the passenger vehicle market 3and 7%
of the market for light commercial vehicles in the Pretoria/Centurion area.
The effect on competition
Other Nissan and Fiat
dealers that are
represented in Pretoria
are:
1. Toits Nissan
2. Terrano Motors
3. Pretoria Nissan
4. McCarthy Nissan
2
3
5. Atlantis Nissan
From the above it is
clear that there is still
substantial intra-brand
competition left in this
market post the merger.
Moreover, the parties
experience sufficient
inter-brand competition
from multi-franchise and
other independent
dealers of products such
as V olkswagen, Toyota,
Opel, BMW and
Mercedes Benz in this
geographic market.
The merger would
therefore not
substantially lessen
competition in the
relevant market.
Public Interest
The merger does not
raise any of the public
interest concerns
enumerated in section
26(3).
_____________ 17 January 2002
D.L. Lewis Date
Concurring: M. Moerane and N. Manoim
See geographic market analysis in DaimlerChrysler Case, Competition Tribunal Case No: 44/LM/Jul01.
The market for forklifts is split between rentals and sales. Rentals account for approximately 70% of demand and sales
the balance.
The figure does not include Kia, Hyundai and Daihatsu sales, all imported by Imperial dealers, because these are not
available for the Pretoria area. In any event, only 6.7% of the total passenger vehicles are imported of which 5 % are
Renault motors. It should, therefore, not have a material affect on the market share.