IN THE COMPETITION TRIBUNAL CASE NO. 115/LM/NOV07
In the matter between:
MICROS South Africa (PTY) LTD Acquiring firm
And
MICROSFIDELIO SOUTH AFRICA (PTY) LTD
COMPUTER LODGING SYSTEMS (PTY) LIMITED
MICROS SPECIALIZED SOLUTIONS (PTY) LTD Target firms
______________________________________________________________________
Panel : DH Lewis (Presiding Member), Y Carrim (Tribunal Member), M Mokuena
(Tribunal Member)
Heard on : 19 December 2007
Order issued on : 19 December 2007
Reasons issued on : 15 January 2008
REASONS FOR DECISION
APPROVAL
[1] On 19 December 2007 the Tribunal unconditionally approved the merger between
Micros South Africa (Pty) Limited and MicrosFidelio South Africa (Pty) Limited, Computer
Lodging Systems (Pty) Limited, and Micros Specialized Solutions (Pty) Ltd. The reasons for
approval follow:
PARTIES TO THE TRANSACTION
[2] The primary acquiring firm is Micros South Africa (Pty) Limited (“Micros SA”), a newly
formed company which has not traded. Micros SA’s shareholders and their respective
shareholding is as follows: 1) Management has 51% 1; 2) Safika Investment (Pty) Ltd, a Black
1 Management members hold their shares individually and do not vote together
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Economic Empowerment (BEE) company has 26%; and 3) Corvest 6 (Pty) Ltd 2 (“Corvest 6”)
has 23%. In terms of the control structure, Micros SA will be negatively controlled by Safika
Investments and Corvest 6, as a result of minority provisions conferred on these firms the draft
shareholders agreement for Micros SA. 3
[3] There are three primary target firms namely, MicrosFidelio South Africa (Pty) Limited
(“Micros”)4, Computer Lodging Systems (Pty) Limited (“CLS”) 5 and Micros Specialized
Solutions (Pty) Ltd (“MSS”) 6.
THE TRANSACTION
[4] Micros SA intends to purchase the businesses of Micros, CLS and MSS as going
concerns. As a result of the transaction Micros SA will own the businesses of Micros, CLS and
MSS. The rationale for this transaction is to empower the businesses of the target firms by
introducing Safika Investments, a BEE company.
ACTIVITIES OF THE MERGING PARTIES
[5] FirstRand Limited, the ultimate controller of Micros SA, has interests in the provision of
a variety of banking services, including, retail banking, installment credit finance and merchant
banking.
[6] Micros and CLS have interests in information management solutions,
including software, hardware enterprise system integration to the restaurants,
hotels, and leisure and entertainment industries. Safika Holdings holds a 40%
stake in African Resonance Business Solutions (Proprietary) Limited which is active
in the supply of point-of-sale terminals, related software and payment solutions,
focusing on the retail and banking sectors. MSS has interests in the provision of
handheld, portable transactional technology and software used by Fast Moving
Consumer Goods multinationals, supply chain, logistics and related industries for
rapid data capturing and decision making at point of transaction.
[7] From the information provided by the merging parties it was unclear whether or not there
[7] From the information provided by the merging parties it was unclear whether or not there
was an overlap in the point of sale software and hardware products supplied by Micros and
African Resonance. At the hearing the merging parties clarified Micros’ products are specifically
2 Corvest 6 is ultimately controlled by First Rand Holdings which is controlled by FirstRand
Limited
3 See shareholders’ agreement on pg. 65 of the merger record
4 Micros is controlled by Quantum Leap Investments
5 The individual shareholders of CLS are; P Booth, M McEnery; M Kenny and J Maidment
6 The individual shareholders of MSS are P Booth; M McEnery and S Gilliatt
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tailored to the restaurants, hotels and leisure, and entertainment industries, whilst African
Resonance products are specifically tailored for the retail and banking sectors. Moreover,
Micros and African Resonance products are not substitutable as they use different technology
and perform different key functions.
COMPETITION EVALUATION
[8] This transaction has no negative competition effects as there is no overlap in the
activities of the merging parties. There is no vertical integration and no horizontal concerns
arise. Furthermore, there are no negative effects on employment and no significant public
interest issues to be concerned about.
CONCLUSION
[9] We find that this transaction is unlikely to substantially lessen or prevent competition,
and accordingly approve the merger unconditionally.
_______________ 15 January 2008
Y Carrim Date
Tribunal Member
D Lewis and M Mokuena concur in the judgment of Y Carrim
Tribunal Researcher: L Xaba
For the merging parties : Cliffe Dekker
For the Commission : M Mohlala
(Mergers & Acquisitions)
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