COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 127/LM/Nov07
In the matter between:
Blue Beacon Investments 190 (Pty) Ltd Acquiring Firm
And
Pamodzi Investment Holdings (Pty) Ltd Target Firm
Panel : D Lewis (Presiding Member), Y Carrim (Tribunal Member) and M
Mokuena (Tribunal Member)
Heard On : 19 December 2007
Decided on : 19 December 2007
Reasons Issued on : 23 January 2008
Reasons for Decision
Approval
[1] On 19 December 2007 the Competition Tribunal issued a Merger Clearance
Certificate approving the merger between Blue Beacon Investments 190 (Pty) Ltd and
Pamodzi Investment Holdings (Pty) Ltd unconditionally. The reasons appear below.
Parties
[2] The acquiring firm is Blue Beacon Investments 190 (Pty) Ltd (“SPV”) a company
incorporated under the laws of the Republic of South Africa. SPV is controlled by Batsalani
Industrials (Pty) Ltd (“Batsalani Industrials”). Batsalani Industrials is a wholly owned
subsidiary of Batsalani Holdings (Pty) Ltd (“Batsalani”). 1 [3] The target firm is
Pamodzi Investment Holdings (Pty) Ltd (“PIH”), a company incorporated under the laws of
South Africa. The individual founders of PIH have 55% in PIH. 2
1 Batsalani controls the following firms: Batsalani Junior Mining; Bastalani
Communications; Bastalani Properties. Bastalani is not controlled by any firm. Its
shareholders are: Khan Family Trust 37.05%; Abrahams Family Trust33.25%; Central
Education Trust12.35%; Sunset Trust 12.35% and Staff and Management 5%.
2 The remaining shares in PIH are held as follows: Shady Grove Investments (Pty) Ltd 15.68%; PIH (Pty) Ltd
14.86%; Pambi Trust 8%; Pamodzi Investment Holdings Share Trust 0.71%; Pamodzi Trust 3.80% and Pamodzi
Employee 1.9%. For a list on PIH subsidiaries see page 34 of the Commission’s report.
Transaction
[4] Batsalani, through SPV intends to acquire 20% of the entire issued share capital of
PIH.
Rationale
[5] Batsalani seeks to leverage its seed capital for higher returns from a diversified BEE
portfolio, and to be a leading shareholder in a fastgrowing specialised private equity
investor in South Africa, which it hopes to accomplish through the purchase of a share in
PIH. For the target firm the transaction provides an opportunity to increase ownership by
women in PIH. The transaction also provides the target firm with an opportunity to
liquidate/convert shares into cash. Lastly it was submitted that the transaction will result in
the reintroduction of equity into PIH lost through the buyback of shares from certain
minority shareholders.
Parties’ Activities
[6] Batsalani Industries and SPV are newly formed shelf companies created for
purposes of the present transaction. Batsalani has interests in various sectors, including
telecommunications, media and technology, mining/resources, property as well as private
equity sectors. Batsalani also has interests in the information technology sector through a
company called Gateway Telecoms (“Gateway”). 3
[7] PIH is an investment holding company with interests in various sectors,
including food, information technology, industrial manufacturing, financial
services, mining/resources, automotive and leisure industries. PIH’s interests in
the information technology sector are through a company called Namitech.4
Competition Analysis
[8] An examination of the transaction by the Commission revealed that although both the
merging parties have interests in mining, they don’t offer the same/overlapping products
within those sectors. According to the Commission, in mining Batsalani’s interest are in
platinum whereas PIH’s are in coal and gold mining. The Commission also considered the
platinum whereas PIH’s are in coal and gold mining. The Commission also considered the
3 Gateway provides communications services which include voice data, electronic commerce and management
services to mobile and fixed telecoms operators. It is also in the process of rolling out a pay TV broadcasting
service in South Africa through its subsidiary GTV.
4 Namitech provides secure technology solutions aimed at facilitating trusted card technology, payment solutions
and digital trust services.
effect of the proposed transaction in the information technology sector and found that the
activities of Gateway Telecoms 5 and Namitech do not overlap. 6 Furthermore neither of the
merging parties hold controlling interests in these companies. We therefore agree with the
Commission that the proposed transaction is unlikely to substantially prevent or lessen
competition. .
Public Interest Issues
[9] There are no public interest issues.
Conclusion
[10] Based on the above, we find that the transaction will not result in a substantial
lessening or prevention of competition in the identified markets and is accordingly approved
unconditionally.
___________________ 23 January 2008
Y Carrim Date
Tribunal Member
D Lewis and M Mokuena concurring.
Tribunal Researcher : J Ngobeni
For the merging parties : Cliffe Dekker Inc
For the Commission : Ipeleng Selaledi
5 Gateway Telecoms is a company involved in the telecommunication activities that are aimed at providing
quality communications to mobile and fixed line operators.
6 Namitech is a company that is involved in offering solutions that are aimed at
facilitating trusted card technology payment solutions.