Investec Bank Limited and DCD Dorbyl (Pty) Ltd (13/LM/Jan07) [2007] ZACT 31 (8 May 2007)

COMPETITION TRIBUNAL OF SOUTH AFRICA
       
          Case No:   13/LM/Jan07
In the matter between:
Investec Bank Limited                                             Acquiring firm
And 
DCD Dorbyl (Pty) Ltd                                                                         Target firm
Panel:  N Manoim (Presiding Member), M Holden (Tribunal Member)  
and M Mokuena (Tribunal Member)
Heard on: 14 March 2007
Order issued on:    14 March 2007
Reasons issued on: 08 May 2007
   
Reasons for Decision
APPROVAL
1] On 14 March 2007, the Tribunal approved the merger   between   Investec Bank  
Limited and DCD Dorbyl (Pty) Ltd.  The reasons for approval follow.
THE TRANSACTION
2] The   acquiring   firm   is   Investec   Bank   Ltd   (“Investec”)   which   is   controlled   by  
Investec   Limited.   Investec   Limited   is   listed   on   the   JSE   and   according   to   the  
parties, no single shareholder controls Investec Limited.   1  The target firm is the  
business   of   DCD   Dorbyl   (“DCD   Dorbyl”)   which   is   jointly   controlled   by   DCD  
Investment   Trust,   Calshelf   Investments   116   (Pty)   Ltd   (“Calshelf”)   and   Mediro  
Industrial Holdings (Pty) Ltd (“Mediro”). DCD Investment Trust also holds 51% of  
Calshelf.  2 
3] The proposed transaction involves the sale and transfer of the target business to  
1  Please refer to pages 72­94 of the Commission’s record for the Investec group structure.
2  Please refer to page 95 of the Commission’s record for a diagram of the DCD Dorbyl group.
1

Clidet   No.  74 (Pty)  Ltd  (“Newco”) by  shareholders  of   DCD  Dorbyl,  as  a  going  
concern. Investec Bank is to acquire 43% of the shares of Newco with minority  
protection rights. Therefore, post merger, the transferred business will be directly  
owned and controlled by Newco and indirectly by the Investec group.
4] For Investec, the transaction is purely an investment opportunity with a potential  
for good returns, in light  of government’s increased spending on infrastructural  
development.  DCD-Dorbyl is expected to benefit from the
abovementioned large capital expenditure projects which
have already begun through its three operating divisions in
the heavy engineering, rail and marine sectors.
COMPETITION ANALYSIS
5] Newco has not yet commenced trading as it is to acquire the transferred business  
after   completion   of   the   proposed   transaction.   The   Investec   group   is   a   global  
specialist banking group involved in the provision of a diverse range of financial  
products   and   services.   DCD   Dorbyl   is   a   multi­faceted   engineering   company  
offering a wide range of products and services in the heavy engineering, rail and  
marine ship industries. 3
6] In light of the fact that there  is no overlap in the activities of the merging parties,  
we   are   of   the   view   that   the   proposed   transaction   is   unlikely   to   substantially  
prevent   or   lessen   competition   in   any   of   the   markets   in   which   the   parties   are  
active. 
7] There are no other significant public interests issues which would alter our view  
and we accordingly approve the transaction without conditions. 
__________________
N Manoim              
M Holden and M Mokuena concurring.
3Please see the parties competitiveness report for more detail on the activities.
2

Tribunal Researcher:  M Murugan­Modise
For the merging parties:  Andries le Grange and Janine Simpson (Hofmeyr 
Herbstein & Gihwala)
 Tsakani Mhlanga (Cliffe Dekker Inc)
For the Commission: L Lamola (Mergers and Acquisitions)
3