COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 93/LM/Nov06
In the matter between:
Autumn Storm Investments 362 (Pty) Ltd Acquiring Firm
And
Outdoor Network (Pty) Ltd Target Firm
Panel: D Lewis (Presiding Member), M Moerane (Tribunal Member) and M Mokuena
(Tribunal Member)
Heard on: 4 December 2006
Order and Reasons issued on: 4 December 2006
Reasons for Decision
APPROVAL
1] On 4 December 2006, the Tribunal approved the merger between Autumn
Storm Investments 362 (Pty) Ltd (“Autumn Storm”) and Outdoor Network (Pty)
Ltd (“Outdoor”). The reasons for approval follow.
THE TRANSACTION
2] Autumn Storm intends acquiring 100% of the entire issued share capital of
Outdoor as well as all the claims against Outdoor.
3] The shareholders of Autumn Storm are Zungu Investments Company (Pty) Ltd
(“Zungu”), Sanlam Limited (“Sanlam”) and the management of Outdoor. 1 The
largest shareholders of Outdoor are Z.Sisulu, RMB Corvest Limited, Derek
Arthur Family Trust and F H & V Durban (Pty) Ltd. 2
1 See page 25 of the Commission’s record for the detailed structure of Zungu.
2 See page 3801 of the Commission’s record.
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4] The transaction introduces a black economic empowerment partner to Outdoor
and is in line with Zungu’s ambitions for participating in the media industry.
According to the parties, the silent shareholders in Outdoor have indicated
their intentions to exit the company. 3
THE PARTIES’ ACTIVITIES
5] Outdoor provides outdoor advertising on billboards, street furniture, instore
point of sales, trailers and promotional items. Autumn Storm is a new company
and has not commenced trading. Sanlam is involved in life insurance,
investment, shortterm insurance and independent financial services.
According to the parties, none of the companies which Sanlam has an interest
in, provides similar products and/or services as those provided by Outdoor.
6] Zungu is an investment holding company with interests in the following areas:
forensics, healthcare, financial services, resources, mining exploration,
recruitment, security services, contract cleaning and cash management.
Sarhwu Investment Holdings Ltd, a subsidiary of Zungu, has a 10% interest in
Screen World (Pty) Ltd, a company providing similar products and/or services
in Gauteng. 4
7] According to the parties, Zungu also intends acquiring a one third stake in
Izimpondo Communications (Pty) Ltd, which is involved in publishing,
communication services, public relations and investment in media companies.
Izimpondo’s main business is the production of a newspaper title “Umafrika.” 5
IMPACT ON COMPETITION
8] There appears to be no overlap in the activities of the parties. The parties
nevertheless submit that Outdoor accounts for 12% of the national outdoor
3 Page 61 of the Commission’s Record.
4 Page 63 of the Commission’s record.
5 Page 634 of the Commission’s record.
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advertising market.
9] Although the challenge of obtaining municipal approval in a specific area
seems to be a critical barrier to entry in the outdoor advertising market, we are
nevertheless satisfied that the transaction does not raise any significant
competition concerns, given the fact that there is no history of collusion in the
industry and customers exert significant countervailing power.
CONCLUSION
10] There are no public interest concerns 6 and we accordingly approve the
transaction without conditions.
____________________
D Lewis
M Moerane and M Mokuena concurring.
Tribunal Researcher: M MuruganModise
For the merging parties: T Molokomme and N Browne (Cliffe Dekker)
For the Commission: S Maphumulo and H Ratshisusu (Mergers and Acquisitions)
6 During the hearing, the parties stated that they had no intention of retrenching any employees.
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