COMPETITION TRIBUNAL
REPUBLIC OF SOUTH AFRICA
Case no.:
49/LM/Jun04
In the large merger between:
Fluxrab Investments no. 90 (Pty) Ltd
and
Metcash Trading Africa Ltd and Metcash Aviation (Pty) Ltd
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Reasons
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Introduction
On 26 August 2004 the Tribunal approved the merger between Fluxrab
Investments No. 90 (Pty) Ltd and Metcash Trading Africa Ltd and Metcash
Aviation (Pty) Ltd without conditions. The reasons are set out below.
The transaction
This is a management buyout in which Fluxrab Investments no 90 (Pty) Ltd
(“Fluxrab”) is acquiring the entire issued share capital of Metcash Trading Africa
Ltd (“Metcash”) and Metcash Aviation (Pty) Ltd (“Metcash Aviation”) from Metro
Cash and Carry Ltd (“Metro”). The transaction excludes Metcash Trading Limited
Australia.
The shareholding in Fluxrab, the primary acquiring firm, will be as follows:
• Management Consortium 35%
• Nedcor Investments 1 30%
• Black Economic Empowerment Consortium (“BEE”) 2 25%
• Metaf Share Incentive Scheme 10%
The management consortium, Nedcor Investment, and the BEE consortium will
jointly control Fluxrab.
The transaction, in its current form, was concluded because Metro’s major
shareholders did not believe that listing Metcash on the JSE Securities Exchange
South Africa would enhance Metro’s shareholder wealth nor achieve certain
objectives such as black economic empowerment and establishing a distinct
identity from Metro’s Australian subsidiary.
Effect on Competition
There is no overlap in the activities of the merging parties. Fluxrab is a dormant
company, which has never traded. 3 Metcash, primarily, has interests in the
market for the wholesale and distribution of fast moving consumer foods.
The merger will not result in the removal of a competitor as the transaction
involves a management buyout and will accordingly have no effect on
competition in the relevant market.
Public interest
The transaction raises no public interest concerns.
___________ 13 September 2004
1 Nedcor investments is controlled by Nedbank Ltd, a subsidiary of Nedcor Limited. Nedcor’s main
shareholders are Old Mutual Life Insurance (South Africa) Limited with 33% and Old Mutual (South
Africa Limited), with 18%.
2 The BEE consortium consists of African Renaissance Holdings Ltd, South African National Taxi
Association, Contralesa Investment Holdings (Pty) Ltd, Women Development Bank Investment Holdings
(Pty) Ltd and Kumnandi (consortium of black individuals and the National Tourism and Hospitality
Association). The different members of the consortium have interests in other firms, none of which are
relevant to this transaction.
3 Nedcor Investments, Old Mutual Life Insurance and the African Renaissance consortium do not provide
any services that overlap with those of the target firm.
2
D Lewis Date
Concurring: N Manoim, T Orleyn
For the merging parties: Fluxmans Attorneys
For the Commission: K Ramathula
3