COMPETITION TRIBUNAL OF SOUTH AFRICA
Case NO: 08/LM/Jan08
In the matter between
Umlingo Trade and Invest 71 (Pty) Ltd Primary Acquiring firm
And
Mining Capital Equipment Business,
A Division of Longyear S.A (Pty) Ltd Primary Target Firm
Panel : Y Carrim (Tribunal Member); M Mokuena (Tribunal Member); and U
Bhoola (Tribunal Member)
Heard on : 05 March 2008
Decided on : 05 March 2008
Reasons Issued : 07 April 2008
Reasons for Decision
Approval
[1] On 5 March 2008 the Competition Tribunal issued a Merger Clearance Certificate
approving the merger between Umlingo Trade and Invest 71 (Pty) Ltd and Mining Capital
Equipment Business, a Division of Longyear S.A. (Pty) Ltd unconditionally. The reasons
appear below.
Parties
[2] The primary acquiring firm is Umlingo Trade and Invest 71 (Pty) Ltd (“Umlingo”), a
company incorporated under the laws of the Republic of South Africa. Umlingo is jointly
controlled by BoE Private Equity Investments (Pty) Ltd (“BoE Private Equity”) 1 and Cast
Arena Trade and Invest 98 (Pty) Ltd (“Cast Arena”). 2
1 BoE Private Equity is a firm used by Nedbank Capital Division of Nedbank Ltd (“Nedbank Capital”) as a vehicle
through which to invest in privately controlled companies. BoE Private Equity is owned 100% by Nedbank Ltd
which is owned 100% by Nedbank Group.
2 Cast Arena is controlled by Matasis Investment Holdings (Pty) Ltd (“Matasis”). Matasis provides financial,
trusteeship and curatorship services .
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[3] The primary target firm is Mining Capital Equipment Business (“MCE Business”),
a division of Longyear S.A. (Pty) Ltd (“Longyear SA”). Longyear SA is a company
incorporated under the laws of the Republic of South Africa.
Transaction
[4] In terms of the proposed transaction Umlingo intends to acquire MCE business from
Longyear, as a going concern. The transaction will result in Umlingo having control over the
MCE Business.
Rationale for the Transaction
[5] From the acquiring firm’s perspective the proposed transaction represents an
attractive opportunity for BoE Private Equity, an investment company used by Nedbank
Capital Private Equity for its investments.
[6] Longyear SA is seeking to dispose of noncore operations such as the MCE
Business
Parties Activities
[7] Umlingo is a newly established company and does not have any business activities.
The Nedbank Group operates as a banking and financial service provider. 3 MCE Business
is involved in the mining equipment business and its activities entails the manufacture,
marketing and distribution of hydraulic rockdrills, drilling rigs, Load Haul Dump (“LHD”)
machines, utility vehicles and special purpose vehicles for underground hard rock mining
which are all manufactured in South Africa.
Competition Analysis
[8] According to the Commission there is no overlap in the activities of the merging firms
as the acquiring firm does not have interests in the manufacturing and distribution of mining
equipment where the target firm is active. We therefore agree with the Commission that the
proposed transaction is unlikely to substantially prevent or lessen competition. There are no
public interest issues.
3 The Nedbank Group offers a wide range of wholesale and retail banking services
through three main business clusters, namely Nedbank Corporate, Nedbank Capital and
through three main business clusters, namely Nedbank Corporate, Nedbank Capital and
Nedbank Retail, and a joint venture with Imperial Holdings. Nedbank Capital comprises the
group’s investment banking businesses. It consist of a number of divisions that together manage structuring,
lending, underwriting, corporate finance, private equity and trading business
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Conclusion
[9] 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.
___________________ 07 April 2008
Y Carrim Date
Tribunal Member
M Mokuena and U Bhoola concurring
Tribunal Researcher : J Ngobeni.
For the merging parties : Bowman Gilfillan
For the Commission : Themba Mahlangu
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