COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 115/LM/Oct08
In the matter between:
Optimum Coal Holdings (Pty) Ltd Acquiring Firm
and
AKA Resources (Pty) Ltd Target Firm
Panel : D Lewis (Presiding Member), Y Carrim (Tribunal
Member) and N Manoim (Tribunal Member)
Heard on : 03 December 2008
Order issued on : 03 December 2008
Reasons issued on : 08 December 2008
Reasons for Decision
Introduction
[1] On 03 December 2008 the Tribunal approved the acquisition by Optimum
Coal Holdings (Pty) Ltd of AKA Resources (Pty) Ltd. The reasons follow
below.
Parties
[2] The primary acquiring firm is Optimum Coal Holdings (Pty) Ltd (“Optimum
Coal Holdings”), a company incorporated under the laws of the Republic of South
Africa. Optimum Coal Holdings is not controlled by any single firm.
[3] Optimum Coal Holdings controls the following firms:
• Optimum Coal Mine (Pty) Ltd,
• Optimum Coal Terminal (Pty) Ltd,
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• Ilitha Resources (Pty) Ltd,
• Universal Pulse Trading 75 (Pty) Ltd,
• Chaldean Trading 46 (Pty) Ltd,
• Grey Jade (Pty) Ltd and
• Point Blank Trading 122 (Pty) Ltd.
[4] The primary target firm is AKA Resources (Pty) Ltd (“AKA Resources”), a
company incorporated under the laws of the Republic of South Africa. AKA
Resources is solely controlled by AKA Resources Holdings (Pty) Ltd, which is in turn
controlled by AKA Capital (Pty) Ltd. AKA Resources controls Main Street 431 (Pty)
Ltd and Siyanda Coal (Pty) Ltd.
Transaction
[5] In terms of the structure of the transaction, Optimum Coal intends to acquire
the entire issued share capital of AKA Resources. On completion, AKA Resources
will be controlled by Optimum Coal.
Rationale
[6] This transaction presents Optimum Coal with an opportunity to grow its coal
business.
[7] AKA Resources submits that the proposed transaction presents it with an
opportunity to realise a return on its investment.
Parties Activities
[8] Optimum Coal is a coal mining and exploration group which is involved in the
production of thermal coal for the generation of electricity and production of synthetic
fuel.
[9] AKA Resources is an investment holding company which does not trade. Its
subsidiaries, i.e. Main Street and Siyanda Coal are involved in the production of
thermal coal.
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Competition Analysis
[10] There is an overlap between the activities of the merging parties in respect of
the production of thermal coal. The geographic market for this market is national. The
merging parties’ combined post-merger market share is approximately 5.2%.
Competitors of the merging parties include Eyesizwe Coal, Xstrata Coal, Ingwe Coal,
BHP Billiton, Anglo Coal and Kumba.
[11] This transaction is unlikely to substantially prevent or lessen competition in
the market for the production of thermal coal as the merging parties’ combined post-
merger market share remains low.
Public Interest
[12] The transaction does not raise any significant public interest concerns.
___________________ 08 December 2008
D Lewis Date
N Manoim and Y Carrim concurring.
Tribunal Researcher: I Selaledi
For the merging parties: Glyn Marais Inc
For the Commission: T Ravhugoni
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