COMPETITION TRIBUNAL
REPUBLIC OF SOUTH AFRICA
Case no.: 09/LM/Feb03
In the large merger between:
Corpcapital Investments (Pty) Ltd
and
CICL Investment Holdings (Pty) Ltd
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Reasons
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Approval
On 30 April 2003 the Competition Tribunal issued a Merger Clearance Certificate
approving the merger between Corpcapital Investments (Pty) Ltd and CICL Investment
Holdings (Pty) Ltd. The reasons are set out below.
The transaction
A consortium of investers, represented by Corpcapital Investment Holdings (Pty) Ltd
(“Corpcapital”), intend to acquire three companies via three separate transactions namely:
1. CICL Investment Holdings (Pty) Ltd (“CICL”)
2. Chastead Investments (Pty) Ltd (“Chastead”)
3. Brummers Funeral Insurance Company (Pty) Ltd (“Brummers”)
Of the above three transactions only the first transaction, i.e. the acquisition of CICL by
Corpcapital, meets the determined threshold for a merger to be notifiable in terms of the
Act. The second and third transactions fall outside the Commission’s jurisdiction.
In the the first transaction Corpcapital Investments will acquire, on behalf of purchasers
nominated by Corpcapital Investments, all the issued share capital in and claims on the
loan account against CICL from Unifer. In terms of the second transaction Oakwood and
Stenny will sell all their shares in Chastead to CICL and in terms of the third transaction
CICL will acquire all the shares and claims on loan account in Brummers. Following the
completion of all three transactions Brummers and Chastead will be wholly owned
subsidiaries of CICL. Corpcapital and Ellerines, holding 30% and 37.5% respectively,
will control CICL. The remaining shareholders in CICL will be Oakwood with 12.5%,
Stenny 12.5% and Expectra 7.5%. Oakwood, Stenny and Expectra are each entities
owned by management of the core businesses within the newly structured CICL.
CICL, the primary target firm, is a shell company incorporated for the purpose of holding
shares and loan accounts in Constantia Insurance Company Ltd, Peoples’ Industrial
Advice Centre (Pty) Ltd (“PIA”) and PIA Finance Ltd.
Effect on Competition
Corpcapital operates in the financial services industry and provides investment banking
and private equity, property asset management, corporate finance, financial products and
funding and group suppor services.
Ellerines operates in the retail furniture and household appliance sector. Its wholly owned
subsidiary CPICL is a shortterm insurer. However, it operates under a licence that limits
it to providing consumer insurance to Ellerine’s credit customers only.
CICL’s subsidiary, Constantia, is also a shortterm niche insurer deriving income mainly
from underwriting activities and from renting out its insurance licence. PIA provides
underwriting manager services while PIA Finances is a dormant company.
Although both CPICL and Constantia are active in the shortterm insurance market they
do not compete in the same market due to CPICL’s limited trading license. None of
Corpcapital’s business activities overlap with those of CICL.
There is thus no horizontal product overlap or vertical integration between the products
of the merging parties. We therefore agree with the Commission that the merger will not
substantially prevent or lessen competition
Public interest considerations
The transaction will not result in any retrenchments and does not raise any other public
interest grounds.
____________ tt.08.08
N Manoim Date
interest grounds.
____________ tt.08.08
N Manoim Date
Concurring: D Lewis, L Reyburn
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