COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 43 /LM/Apr07
In the matter between
Johnnic Book Retail Ltd
T/A Exclusive Books Acquiring Firm
And
Van Schaik Bookstores
A division of Via Afrika Ltd Target Firm
Panel : D Lewis (Presiding Member), N Manoim (Tribunal Member)
and M Mokuena (Tribunal Member)
Heard on : 08 August 2007
Decided on : 08 August 2007
Reasons Issued : 05 November 2007
REASONS
Approval
[1] On 08 August 2007 the Competition Tribunal issued a Merger Clearance Certificate
unconditionally approving the merger between Johnnic Book Retail Ltd T/A Exclusive Books
and Van Schaik Bookstores a Division of Via Afrika Ltd. The reasons appear below.
Parties
[2] The acquiring firm is Johnnic Book Retail Ltd T/A Exclusive Books (“Exclusive
Books”) a publicly listed company. Exclusive Books is entirely controlled by Johnnic
Communications Ltd (“Johncom”). 1
[3] The target firm is Van Schaik Bookstores (“Van Schaik”) a Division of Via Afrika Ltd
(“Via Afrika”). Via Afrika is a company controlled by Media24 Ltd (“Media24”), which in turn is
controlled by Naspers Ltd (“Naspers”). 2
Transaction
1 Johncom is a company that is listed on the JSE and does not have any controlling shareholders.
2 Naspers is a public company listed on the JSE and therefore is not directly or indirectly controlled by any
shareholder.
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[4] The transaction involves the acquisition by Exclusive Books of all the issued shares
in Van Schaik.
Rationale for the Transaction
[5] From the acquiring firm’s perspective the proposed transaction will enable it to
change its product mix, providing general and academic books.
[6] From the target firm’s perspective Naspers advised that the sale of academic books
by Van Schaik division does not form part of its core business, and it has decided to divest
of its interest in Van Schaik.
Activities of the Parties
[7] Exclusive Books is involved in the trading of a wide range of general books including
fictional and nonfictional novels, biographies, health related books, business related books,
children’s books, travel books and religious books and magazines. Their stores are located
in shopping malls. Johncom is a supplier of media, including national newspapers,
magazines and digital services. Van Schaik is a trader of academic books and a very limited
seller of general books. Their stores are located close to, or on, University campuses and
other academic institutions.
Relevant Market
[8] The merging parties submitted that the relevant product markets in which the parties
are active are the markets for the retail sale of general books and retail sale of academic
books. In its analysis of the relevant product market the Commission considered three
issues namely: demand side substitution, supply side substitution and the fact that to some
extent the parties’ activities overlap. The Commission agreed with the product market
definition advanced by the merging parties and it therefore concluded that the product
market is the market for retail sale of general books and retail sale of academic books. With
regard to the geographic market the Commission considered the impact of the merger at a
local level based on the overlapping stores identified on the basis of both 2km and 5km
radius.3 We agree with the commission’s conclusions.
radius.3 We agree with the commission’s conclusions.
3 On the 2km radius Exclusive Books has stores in the following areas: Brooklyn, Claremont, Stellenbosch, East
London and Nelspruit. On the 5km radius Exclusive Books has stores in Bloemfontein and Roodepoort. Van
Schaik has the following overlapping stores within the 2km radius: Hatfield, Rondebosch, Stellenbosch, East
London and Nelspruit. On the 5km radius a further two stores overlapping are identified namely: Bloemfontein
and Roodepoort.
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Competition Analysis
[9] The Commission’s examination of the proposed transaction showed that the
proposed transaction will result in both horizontal and vertical effects. According to the
Commission there is an overlap in the activities of the merging parties in the sense that
exclusive books occasionally stocks academic books and Van Schaik stocks a limited
number of general books. Furthermore the Commission’s investigation confirmed that the
overlap does not seem to be significant, given the fact that less than 1% of Exclusive Books’
turnover is from academic books and 5% of Van Schaik’ turnover is derived from general
books sales. The Commission’s investigation of vertical integration did not uncover
competition issues of concern given the amount of general books sold by Van Schaik and
the fact that its store locations are predominantly on or near higher educational institution
campuses. We agree with the Commission that no foreclosure concerns arise as a result of
the proposed transaction. There are no public interest issues.
Conclusion
[10] Based on the above the transaction will not result in a substantial lessening or
prevention of competition in the identified markets and is accordingly approved
unconditionally.
___________________ 05 November 2007
D. Lewis Date
Tribunal Member
N Manoim and M Mokuena concurring
Tribunal Researcher : J Ngobeni
For the merging parties : Anthony Norton (Webber Wentzel Bowens)
For the Commission : Geffrey Mudzanani (Mergers and Acquisitions)
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