COMPETITION TRIBUNAL
REPUBLIC OF SOUTH AFRICA
Case No: 88/LM/Sep05
In the large merger between:
Investec Bank Limited
and
BCE Foodservice Equipment (Pty) Ltd
Reasons for Decision
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APPROVAL
On 21 October 2005 the Competition Tribunal issued a Merger Clearance
Certificate approving the merger between Investec Bank Limited and BCE
Foodservice Equipment (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 Investec Bank Limited (“Investec”), a subsidiary of
Investec Limited.
2. The primary target firm is BCE Foodservice Equipment (Pty) Ltd (“BCE”). It
controls Gilbere Investments (Pty) Ltd, THH Properties (Pty) Ltd and
Merxteam SA (Pty) Ltd. Gilbere owns all the shares in Business and
Catering Equipment (Pty) Ltd (“B&C Equipment”). 1
3. BCE is held as follows:
1 Gilbere also owns Daisy Street Investments No. 169 (Pty) Ltd and Anvil Catering Equipment (Pty) Ltd.
Both are dormant and in the process of being liquidated.
Investec 49%2
Global Capital Fund No. 2 25%
Laurence Michael Nestadt 13%
Frank Boner 13%
The Merger Transaction and Rationale
4. Investec is entering into a loan agreement with BCE for the purpose of
providing loan finance required by BCE to repay the loan account for the
purchase of B&C Equipment. Investec is acquiring certain rights in terms of
the loan agreement to ensure that BCE remains creditworthy and that its
own risk exposure is reduced.
5. Investec is also entering into a shareholders’ agreement with BCE and its
other shareholders, limiting BCE’s ability to amend or implement certain
resolutions or transactions without Investec’s approval.
6. Therefore, postmerger Investec will have acquired certain rights in its
favour, in terms of the loan and shareholders’ agreements.
The relevant product and geographic markets
7. BCE imports, distributes and exports industrial kitchen and catering
equipment to firms in the hospitality and food service industries via a dealer
network. It has sole SA distribution rights for a number of highquality
international brands. It also has a range of its own brands. Investec is a
specialist banking group, providing a variety of financial products to a niche,
highincome customer base. Its primary areas of activity are investment
banking, treasury, asset management, specialised finance and private client
banking.
7. There is accordingly no product overlap. None of the firms within the
Investec group offer competing products or services with that of BCE.
Conclusion
We conclude that there is no effect on competition. The merger will not lead to a
substantial lessening or prevention of competition in any market. There are no
public interest concerns which would alter this conclusion.
2 Investec acquired this stake in BCE early in 2004.
The Tribunal therefore approves the transaction unconditionally.
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31 October 2005
L. Reyburn Date
Concurring: M. Mokoena, T. Orleyn
For the merging parties: D. Rudman, Werksmans Attorneys
For the Commission: O. Strydom, Mergers and Acquisitions