COMPETITION TRIBUNAL OF SOUTH AFRICA Case No: 6/LM/JAN 08
In the large merger between:
Imperial Group (Pty) Ltd Acquiring Firm
And
Roshcon (Pty) Ltd Target Firm
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Panel : Y Carrim (Presiding Member) U Bhoola (Tribunal
Member), and M Mokuena (Tribunal Member)
Heard on : 5 March 2008
Decided on : 5 March 2008
Reasons Issued: 6 March 2008
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REASONS
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Approval
[1] On 5 March 2008, the Tribunal issued a merger clearance certificate unconditionally
approving the merger between the abovementioned parties. The reasons for the decision follow.
Parties
[2] The primary acquiring firm is Imperial Group (Pty) Ltd (“Imperial”), a listed company
which is a subsidiary of Imperial Holdings. 1 The primary target firm is Roshcon (Pty) Ltd
(“Roshcon”), a subsidiary of Eskom Holdings Limited (“Eskom”), which is controlled by the
South African government. 2
1 The major shareholders of Imperial are: Public Investment Corporation 18.21%; Old Mutual
11.23%; Ukhamba 8.4%; and Lereko Mobility 7.25%
2 Roshcon does not control any firm
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The Transaction and its Rationale
[3] In terms of the proposed transaction, Imperial intends to acquire the MAN commercial
vehicle motor dealership business of Roshcon as a going concern. 3 The rationale for the
proposed transaction for Imperial, is to expand its existing commercial vehicle business. For
Eskom, it was submitted that the TAS Automotive Dealership, consisting of MAN commercial
vehicles, does not form part of its core asset and for this reason, Eskom intends to dispose of it.
The Parties’ Activities
[4] Imperial has activities in the wider transportation and mobility markets. 4 Roshcon is
active in the management of a fleet of heavy transport vehicles and sells MAN trucks and spare
parts, and also provides workshop services for trucks in South Africa.
The Relevant Market
[5] According to the merging parties, the relevant market is the commercial vehicle market
which sells commercial vehicles in access of 8.5 tons nationally. Both Imperial and Roshcon
provide services in the commercial motor sector dealing specifically in new commercial vehicles
and parts, as well as providing workshop facilities. Therefore the overlap in the activities of the
merging parties exists in respect of the sale of new commercial vehicles and spare parts in
South Africa.
Market Shares and Competitive Analysis
[6] Imperial holds an estimated market share of 20.5% and Roshcon has 1.2% market
share. Post merger, the parties will have a combined market share of 21.7%. The market share
accretion is small and the change in HHI is 49.2 points with is less than 50 points. The relevant
market is not highly concentrated, and the merged entity will continue to face competition from
other reputable players such as McCarthy Motor Holdings, Barloworld, Supergroup, Unitrans
and Combined Motor Holdings.
Public Interest Issues
[7] There are no public interest issues. The merging parties submitted that the proposed
[7] There are no public interest issues. The merging parties submitted that the proposed
transaction will have no negative effects on employment as employees will be retained and will
not be worse off post merger.
Conclusion
3 MAN commercial vehicles are consisted within the TAS Automotive Dealership held by
Eskom
4AMH, a 90% held subsidiary of Imperial Holdings houses many of the motor vehicle
dealership activities primarily in the imported motor vehicles sector. See pg. 7 of schedule 3
of the Commission’s merger record
For more details on Imperial’s activities; See Tribunal decision in Imperial Holdings Ltd and
Terex Africa (Pty) Ltd Case No. 88/LM/OCT06
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[8] Based on the above, the proposed transaction is unlikely to result in a substantial
lessening or prevention of competition in the identified markets and is approved unconditionally.
_________________ 6 March 2008
Y Carrim
U Bhoola and M Mokuena concurring.
Tribunal Researcher: L. Xaba
For the merging parties : Tugendhaft Wapnick Banchetti and Partners
For the Commission : M Mohlala and K Kganare (Mergers and Acquisitions)
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