COMPETITION TRIBUNAL
REPUBLIC OF SOUTH AFRICA
Case No: 61/LM/Jul05
In the large merger between:
Imperial Group (Pty) Ltd
and
Bulktrans (Pty) Ltd
Reasons for Decision
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APPROVAL
On 30 August 2005 the Competition Tribunal issued a Merger Clearance
Certificate approving the merger between the Imperial Group (Pty) Ltd and
Bulktrans (Pty) Ltd in terms of section 16(2)(a). The reasons for the approval of the
merger appear below.
The Parties
1. The acquiring firm is Imperial Group (Pty) Ltd. (“IG”). IG is controlled by
Imperial Holdings Ltd, along with a number of other subsidiaries.
2. The primary target firm is Bulktrans (Pty) Ltd (“BT”), controlled by Eyethu
Logistics, ultimately controlled by the Deysel Family Trust (“Deysel”).
Bulktrans controls other firms in Botswana, Namibia, Lesotho and
Swaziland.
The Merger Transaction
3. IG will acquire 100% of the transport assets (including customer contracts
being ceded), trademarks and goodwill of BT and its subsidiaries.
Rationale for the Transaction
d. BT wishes to exit the business of providing logistics and transport
services to petrochemical companies. It lacks the technical
infrastructure and resources to be able to services its vehicles
sufficiently. It is unable to grow and remain viable in the market.
The relevant product market
5. The product overlap between the activities of BT and IG is in the
transportation and distribution of petrochemicals. This is a narrower
interpretation of the market, which could conceivably be broadened to
include other modalities of transportation of fuel, such as rail or pipeline.
6. The Commission did not express a view as to whether the relevant market
may be broadened, since no competition concerns arise on the narrower
definition. We agree with this approach.
The relevant geographic market
7. Since the large oil companies tender for the distribution of
petrochemicals on a nationwide basis, the market is defined as a
national one.
Effect on Competition
viii.The combined postmerger market share is estimated at
4.55%. BT’s contribution to this market share is less than 1%.
There are at least 12 other competitors in this market.
9. The Commission market enquiries revealed that barriers to entry into the
market are low and that tanker capacity in the market is due to increase.
10. There are no vertical concerns arising from this transaction.
Conclusion
We conclude that the merger will not lead to a substantial lessening or prevention
of competition.
The Tribunal therefore approves the transaction unconditionally. There are no
public interest concerns which would alter this conclusion.
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1 September 2005
N. Manoim Date
Concurring: Y. Carrim, D. Lewis
For the merging parties:
For the Commission: