COMPETITION TRIBUNAL
REPUBLIC OF SOUTH AFRICA
Case no: 35LM/APR06
In the large merger between:
Oosthuizen Transport SA (Pty) Ltd Acquiring Firm
And
Oosthuizen’s Businesses Conducted
Under Eight Different Companies Target Firm
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Reasons for Decision
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Approval
1. On 31 May 2006, the Tribunal unconditionally approved the proposed
merger transaction between the abovementioned parties. The reasons for the
decision follow.
Parties
2. The acquiring firm is Oosthuizen Transport SA (Pty) Ltd (“Newco”). The
shareholders of Newco are KJF Holdings (Pty) Ltd (“Holdco”) and Safika
Investment (Pty) Ltd (Safika Investment). Holdco will hold 64% of the issued
shares in the share capital of Newco and Safika Investment will hold the
remaining 36% shares. Standard Bank of South Africa Ltd (Standard Bank)
jointly controls Safika Holdings in that it holds 18% of its share capital and
also has 20% effective control over Safika. 1
3. The target firms are the Oosthuizen businesses. 2 The Oosthuizen
brothers jointly control all the primary target firms.
Transaction
4. The transaction involves the introduction of Safika investment as a
strategic black economic empowerment (“BEE”) partner to Newco. Safika
Investment shall hold 36% of the total issued share capital of Newco, whilst
1The other shareholders in Safika Holdings that also exercise joint control can be found on pages
184185 of the parties joint Competitive Report. The names of the companies Safika Holdings has
control on can be found on page 3 and 4 of the Commission’s Report.
2 For a list of the Oosthuizen see page 179 of the parties joint Competitive Report.
the owners of the target firms will acquire the remaining 64% shares in the
share capital of Newco through Holdco. Postmerger Newco will operate the
business of the short haul of coal for mine that is currently conducted by the
target firms. 3 After the transfer of the businesses of the target firms to
Newco, the target firms will be deregistered as companies and cease to
operate the business of the Oosthuizen. Accordingly, the target firms, post
merger, will not compete with the new merged entity.
Rationale of the transaction
5. The Oosthuizen brothers consider the transaction with Safika Investment
as an opportunity for introducing a strategic BEE partner in Newco. Safika
Investment desires to enter the business of short haul of coal for mines and
sees this transaction as the opportunity to fulfil that desire.
The parties’ activities
6. The acquiring firm (Newco) does not trade or conduct any business in any
market at the moment. Holdco is a shareholder in Newco and it hols 64% of
shares in Newco. It does not hold any other interest other than that held in
Newco. Safika Investment is an investment company and is a wholly owned
subsidiary of Safika Holdings. 4 Safika Holdings has interests in
telecommunications, information technology, real estate, human capital
development, financial services, natural resources retail and other services.
Safika Holdings’ interests in natural resources are limited only to investment in
the form of minority shareholding that it holds in various companies. 5
Standard Bank provides a wide range of banking and financial services
products. It also provides a range of advisory services.
7. The target firms provide a service relating to the transportation of coal over
short distances for coal mining companies. This service of transporting coal
short distances for coal mining companies. This service of transporting coal
over short distances of coal is known as the short haul of coal for mines.
Other than the transport of coal for short distances for mines, the target firms
are also active in a small tyre business that is used mainly to service trucks
belonging to them. In addition, the target firms transport byproducts of coal
for disposal purposes.
Competition Evaluation of the Merger
8. There is no overlap in the activities of the merging parties since the target
firms are active in the transportation of coal over short distances, and the
acquiring firms hold no interests in any similar markets as the target firms.
There is no accretion in the market share and the market structure remains
3 The service of transporting coal over short distances is known as the short haul of coal mines.
4 For a list of companies Safika Investment has interest in see page 6 of the Commission’s Report.
5 For a list of those companies see pages 184185 of the Record. None of those companies mentioned
there are involved in transportation of coal or chrome.
unchanged. Since the merging parties are not involved in the same relevant
product markets we find that the transaction is unlikely to substantially prevent
or lessen competition in the relevant markets.
Public interest
9. The merger does not give rise to any public interest concerns.
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Y Carrim 13 June 2006
Concurring: U Bhoola and M Mokuena
For the Commission: Seema Nunkoo (Mergers and Acquisitions)
For the Merging Parties: Andile Nikani (Fluxmans Attorneys)