COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 105/LM/Dec06
In the matter between:
Imperial Holdings Limited Acquiring Firm
And
Jurgens CI (Pty) Ltd Target Firm
Panel : N Manoim (Presiding Member), M Mokuena (Tribunal Member)
and Merle Holden(Tribunal Member).
Heard on : 14 March 2007
Decided on : 14 March 2007
Reasons Issued: 12 April 2007
Reasons for Decision
Approval
1] On 14 March 2007, the Tribunal unconditionally approved the merger between
Imperial Holdings Limited and Jurgens CI (Pty) Ltd. The reasons for approving
the transaction follow.
The parties
2] The primary acquiring firm is Imperial Holdings Limited (‘Imperial’), a public
company duly registered on the JSE Securities Exchange. Imperial is not
controlled by any single firm but has the following as its main shareholders
holding the indicated percentages:
[2.1] Public Investment Corporation 18.21%;
[2.2] Old Mutual Group 11.23%;
[2.3] Ukhamba 10.1%;
[2.4] Sanlam 8.4% and
[2.4] Lereko Mobility 7.25%.
3] Imperial controls in excess of 25 firms. 1 The firm relevant in this transaction is
Tourism Holdings Rental SA (Pty) Ltd trading as Maui and Britz (‘Maui and
Britz’).
4] The primary target firm is Jurgens CI 225 (Pty) Ltd (‘Jurgens’), a company duly
incorporated in terms of the Laws of the Republic South Africa. Jurgens is
controlled by the Michael Delport Trust (62.44%) and Whole Life Investments
(37.556%). Jurgens controls Jurgens Steelworx (Pty) Ltd, a dormant company.
The transaction
5] This transaction involves the acquisition by Imperial of 80% of the entire issued
share capital of Jurgens. 2 In addition Imperial has a call option and the
shareholders of Jurgens have a put option in their respective companies in
terms of which Imperial will directly acquire the remaining 20% of the entire
issued share capital of Jurgens. 3
Rationale for the transaction
6] Imperial perceives the transaction as enabling it to expand its business into
1 Refer to Annexure ‘B’ to the CC 4 filed by Imperial.
2 Imperial will acquire the 80% issued shares in Jurgens by means of the acquisition of
48.749% of the entire issued share capital from current shareholders of Jurgens and the
subscription for 31.215% of the total entire issued share capital of the company.
3 Record pp435438.
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other areas.
7] Mr. Delport who rebuilt the Jurgens business since he acquired it in 1989, now
wishes to realise his investment.
The parties’ activities
Primary acquiring firm
8] Imperial is a holding company which owns subsidiaries active in the
transportation and logistics business. It owns a wide range of businesses that
operate in these industries but the only one that concerns us in this merger is
Maui and Britz, a rental company that rents motorhomes, 4x4 vehicles and
motorbikes mainly to international tourists or international travel agents for their
South African travel packages. 4
Primary target firm
Jurgens
9] Jurgens is a manufacturer of caravans and motorhomes, and various related
accessories. For the purposes of this merger the area of interest is its
manufacture of motorhomes and caravans.
10] Jurgens owns a division which manufactures caravans under the Sprite,
Jurgens, Jurgens Safari and Gypsey brands. It also manufactures motorhomes
under the WJ brand. The conventional caravans market is a niche market and
Jurgens is a major participant in this market. In the offroad caravan ranges
Jurgens competes with other manufacturers and does not dominate this
market. In the motorhome market Jurgens is a major participant. These
products are sold to the distributors who then sell the products to end users or
retailers.
Overlapping activities
4 Refer to pp8487 of the record for details on all of Imperial’s activities.
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11] There is no horizontal overlap between the activities of the merging parties. The
merger, however, results in vertical integration in that the target firm, through its
dealer network, supplies the acquiring firm’s Maui and Brits rental business
with motorhomes, caravans and roof tents which the latter rents to tourists.
Jurgens sells its products to a dealer network. The dealers then sell to retail
buyers or rental companies such as Maui and Brits. The dealers are
independently owned. At present Maui and Brits only rents Jurgens equipment
and not those of any of its competitors in the motor home business, which we
gather from testimony at the hearing is a very small business. Rival motor
home dealers will continue to use their existing networks post merger to rent or
sell their products. There are no other domestic suppliers of caravans, but
overseas suppliers who enter the market have their own outlets and again Maui
and Brits have not been a source of distribution for them at present. 5 Maui and
Brits state that they have 40% of the domestic market. Other firms operate in
this market, which have a national network. Thus although the merger leads to
some vertical integration, there need be no concern of post merger foreclosure
of rivals by the merged firm.
Public Interest
12] There are no public interest issues.
Conclusion
13] This transaction does not raise competition concerns. The transaction is
accordingly approved unconditionally.
________________ 12 April 2007
N Manoim DATE
Tribunal Member
5 Jurgens is by far the most dominant player when it comes to conventional caravans. Its competitors
are a small manufacturer of caravans in Roodepoort and a company in the East Rand that imports a
range for the top end of the market conventional caravans from the UK. It does not seem as if there are
other foreign companies that distribute caravans. (Record p90 and Transcript p3).
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M Mokuena and M Holden concur in the judgment of N Manoim
Tribunal Researcher: R Kariga
For the merging parties: S Mayet, Tugendhaft Wapnick Banchetti and Partners.
For the Commission : K Mahlakoana and H Ratshisusu (Mergers and
Acquisitions)
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