COMPETITION TRIBUNAL
REPUBLIC OF SOUTH AFRICA
Case no: 09/LM/Feb05
In The Large Merger Between:
Standard Bank of South Africa Limited
And
Worldwide African Investment Holdings (Pty) Ltd
Reasons for Decision
Approval
On 13 April 2005 the Competition Tribunal issued a Merger Clearance Certificate
approving the transaction between Standard Bank of South Africa Limited and
Worldwide African Investment Holdings (Pty) Ltd. The reasons for this decision follow.
The transaction
The parties to the transaction are Standard Bank of South Africa Limited (“Standard
Bank”), Khathuma Investments (Pty) Ltd (“Khathuma”) and Worldwide African
Investment Holdings (Pty) Ltd (“Worldwide”) as well as certain existing shareholders of
Worldwide.
The terms of the transaction are as follows:
Release Investments (Pty) Ltd (“Release”), Mr K Ngqula (“Ngqula”) and the Jani Family
Trust (“Jani”), all existing shareholders in Worldwide, will transfer their Worldwide
shares to Khathuma, in return for which they will acquire 74% of the issued ordinary
shares in Khathuma. Standard Bank will thereupon acquire the balance of the 26% of
the issued ordinary share capital of Khathuma for a subscription price of approximately
R20 million, and 80 000 redeemable preference shares in Khathuma for a subscription
price of approximately R140 million. Khathuma will use the proceeds of the Standard
Bank subscriptions to purchase Nedcor Investments (Pty) Ltd shares in Worldwide
(12.15%), as well as the majority of Mr Lot Ndlovu’s shares in Worldwide (1.51%). It will
also subscribe for additional new shares in the issued share capital of Worldwide.
Following implementation of the transaction Khathuma will hold approximately 31% of
the issued shares in Worldwide.
Prior to the merger transaction, no one party controlled Worldwide, although pursuant to
a voting pool arrangement, approximately 32% of the shareholders voted as a block and
were thereby able to exercise certain negative controls over the affairs of Worldwide.
Post merger the Voting Pool, which comprises black shareholders, will increase to
approximately 41%.
According to the parties, the transaction is intended to capitalise Worldwide to assist it
in meeting its medium term cash flow requirements, and to increase its empowerment
profile.
Impact on competition
Standard Bank is a commercial bank providing corporate, investment and merchant
banking services, retail banking, insurance banking, shortterm insurance, life
assurance and property and investment services. Khathuma is a new company and has
not traded before. Worldwide is an investment holding company for a group of
companies and does not sell any products or provide any services. 1
According to the information provided by the Commission and the parties, there is no
horizontal overlap in the activities of the merging parties or their subsidiaries. In
addition, there appears to be no vertical concerns arising from this merger. In the
circumstances we find that the merger is unlikely to substantially prevent or lessen
competition in any market. There are no significant public interest concerns and we
therefore agree with the Commission’s recommendation that the transaction be
unconditionally approved.
19 April 2005
N Manoim Date
Concurring: Y Carrim and M Mokuena
For the merging parties: James Pitman (Tabacks and Associates)
For the Commission: Edwell Mtantato (Mergers and Acquisitions)
1 Through its wholly owned subsidiaries, Afric Energy Resources (Pty) Ltd, Ndibano Investments (Pty)
Ltd, Worldwide is indirectly involved in the refining, marketing and distribution of diesel, petrol,
kerosene and a range of lubricants and the manufacture, marketing and distribution of
telecommunications infrastructure products and services. Through its 51% shareholding in
Worldwide Capital Ltd it is involved in the provision of a range of investment products and
services.
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