Imperial Holdings Limited and Murnau Holdings (Pty) Ltd (16/LM/Mar02) [2002] ZACT 22 (11 April 2002)

COMPETITION TRIBUNAL 
REPUBLIC OF SOUTH AFRICA
Case No: 16/LM/Mar02
In the large merger between: 
Imperial Holdings Limited
and
Murnau Holdings (Pty) Ltd
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Reasons
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Approval
1. On   03   April   2002   we   approved   without   conditions   the   merger  
between Imperial Holdings Limited (Imperial) and Murnau Holdings  
(Pty) Ltd (Murnau) .  Our reasons for this decision are set out below.
The Transaction
2. Imperial is acquiring the entire issued share capital in Murnau from  
Gunther E. R. Reichhelm (Gunther Reichhelm), who is currently the  
sole   shareholder   in   Murnau.     Murnau   is   the   holding   company   for  
various dealerships that sell BMW, Opel and Isuzu motor vehicles.  
Gunther Reichhelm is selling to Imperial these dealerships, together  
with the properties on which those dealerships conduct business. The

sale excludes dealerships and properties in Rustenberg.
3. The   sale   came   about   as   result   of   Gunther   Reichhelm’s   decision   to  
retire   from   business.   For   Imperial,   the   transaction   represents   an  
opportunity   to   obtain   representation   in   the   Vereeniging   and  
Vanderbijlpark   areas   and   to   increase   the   number   of   its   BMW  
dealerships.   Currently   Imperial   has   only   3   BMW   dealerships  
nationwide.
The Relevant Market
4. Murnau   sells   BMW   motor   vehicles   in   Vereeniging   and  
Vanderbijlpark and Isuzu and Opel motor vehicles in Bloemfontein,  
Benoni and Louis Trichard. 
5. Imperial   is   involved   in   diverse   business   activities   ranging   from  
motoring, tourism, aviation leasing and related financial services.  The  
motoring business of   Imperial consists of dealerships that sell, inter  
alia, BMW, Opel and Isuzu motor vehicles. 
6. For purposes of this transaction, the Commission divides the motor  
vehicle industry broadly into passenger and commercial vehicles, the  
former   being   vehicles   for   the   general   purpose   of   transporting  
individuals   and   the   latter   being   vehicles   designed   for   commercial  
usage.  Commercial vehicles  are further divided into light, medium,  
heavy   commercial   vehicles   and   buses   and   coaches.   The   passenger  
vehicles market has further sub­markets ranging from entry­level to  
upper luxury cars. 
7. Both parties sell entry­level and medium commercial vehicles but the  
Commission found that whether an overlap exists or not depends on  
the   geographic   boundaries   of   the   market.     It   found   that   where   the  
market is defined as a local market, limited to towns and surrounding  
areas, then there will be no overlap in the products of the merging  
firms as Murnau and Imperial do not have dealerships in the same  
town in South Africa. Where the market is described as a regional

town in South Africa. Where the market is described as a regional  
market, then there is an overlap in Gauteng in that both parties sell  
entry­level and medium commercial motor vehicles in this province –

Murnau in Vereeniging and Vanderbijlpark and Imperial in Benoni.
8. The Commission’s view is that whether the market is defined as local  
or   regional   is   immaterial   because   the   merger   does   not   raise   any  
competition concerns on either market definition. Where the market is  
defined   as   regional,   then   the  merging  parties   dealerships   would   be  
competing   with   dealerships   from   places   like   Johannesburg   and  
Pretoria, leaving them with insignificant market shares. In any event,  
the Commission found that there is strong inter­brand and intra­brand  
competition in the market. 
9. We   agree   with   the   Commission’s   analysis   and   conclusions   and  
endorse its report.
Public Interest Issues
10.As the business of Murnau is being acquired as a going concern, it is  
not   envisaged   that   there   will   be   any   job   losses   as   a   result   of   the  
merger. No representation was made by the registered trade unions on  
behalf of the employees of the parties.
Finding
11.We   find   that   the   merger   between   Imperial   Holdings   Limited   and  
Murnau Holdings (Pty) Ltd is not likely to result in the substantial  
lessening or prevention of competition in the market. There are no  
substantial public interest concerns resulting from the merger.
____________________ 11 April 2002
N. M. Manoim Date
Concurring: D.H.Lewis, P. Maponya