Wilson Bayly Holmes-Ovcon Ltd and Let Construction (Pty) Ltd (54/LM/May07) [2007] ZACT 50 (20 July 2007)

COMPETITION TRIBUNAL OF SOUTH AFRICA
       
 Case No: 54/LM/May07
In the matter between:
Wilson Bayly Holmes­Ovcon Ltd                                             Acquiring Firm
And
Let Construction (Pty) Ltd                                                        Target Firm
Panel : D Lewis (Presiding Member), Y Carrim (Tribunal
Member) and  M Mokuena (Tribunal Member)
Heard on : 18 July 2007
Order issued on : 18 July 2007
Reasons issued on : 20 July 2007
Reasons for Decision
Approval
1]On 18 July 2007 ,   the Tribunal approved the merger between Wilson Bayly  
Holmes­Ovcon Ltd and Let Construction (Pty) Ltd. The reasons follow below.
The Transaction
2]The   primary   acquiring   firm   WBHO   Construction   (Pty)   Ltd,   a   wholly   owned  
subsidiary   of   Wilson   Bayly   Holmes­Ovcon   Ltd   (“WBHO”)   and   a   company  
listed   on   the   JSE,   is   acquiring   the   entire   issued   share   capital   of   Let  
Construction (Pty) Ltd (“LET”). 
3]As rationale for the transaction WBHO has indicated that it wishes to gain  
additional skilled labour in the construction industry which is currently in very  
short supply. The shareholders of LET wishes to exit this business while at  
the same time securing the employment of its employees. 
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The relevant market  
4]Both WBHO and LET operate as contractor in the civil engineering industry.  
WBHO   builds   roads,   earth   platforms,   railway   lines,   bridges,   mining  
infrastructure,   airports   etc   while   LET   specialises   in   reinforced   concrete  
structures   such   as   bridges,   water   works,   sewage   works,   filtration   plants,  
reservoirs, mining and industrial infrastructural works.
The impact on competition
5]WBHO currently has an estimated market share of 4% and LET 0.7%. Post  
the   transaction   the   merged   entity’s   market   share   will   be   4.7%.   There   are  
numerous players in this market in which Grinaker, Murray & Roberts, Group  
Five and Basil Read are regarded as the largest competitors. 
6]In light of the above we find that the transaction is unlikely to substantially  
prevent or lessen competition in the civil engineering market in South Africa.
Public interest issues
7]The proposed transaction does not raise any public interest issues.
____________________                           20 July 2007
D Lewis                           Date
Y Carrim and M Mokuena concurring.
Tribunal Researcher:  R Badenhorst
For the Commission: Makgale Mohlala and David Masilela (Mergers &  
Acquisitions)
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