COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 101/LM/Sep08
In the matter between:
Hulamin Operations (Pty) Ltd Acquiring Firm
and
Hullet-Hydro Extrusions (Pty) Ltd Target Firm
Panel : D Lewis (Presiding Member), Y Carrim (Tribunal
Member) and T Orleyn (Tribunal Member)
Heard on : 26 November 2008
Order issued on : 26 November 2008
Reasons issued on : 11 December 2008
Reasons for Decision
Introduction
[1] On 26 November 2008 the Tribunal approved the merger between the
aforementioned parties. The reasons follow below.
The transaction and parties
[2] The primary acquiring firm is Hulamin Operations (Pty) Ltd (“Hulamin
Operations”) which is 90% owned by Hulamin Ltd and 10% by Chaldean 67
Trading (Pty) Ltd. Hulamin Operations holds 70% of Hullet-Hydro Extrusions
(Pty) Ltd (“HHE”), the primary target firm in this transaction. The 30% share in
HHE is held by Hydro Aluminium (SA) (Pty) Ltd (“Hydro Aluminium SA”).
[3] In terms of the propo sed transaction Hulamin Operations will increase its
70% shareholding in HHE to 100% by acquiring the additional 30% currently
held by Hydro Aluminium SA.
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Rationale for the transaction
[4] According to the parties the proposed transaction will give Hulamin
Operations as the sole funder of HHE, the opportunity to be a sole
shareholder and to grow its business with HHE consistently. Hydro
Aluminium SA never contributed to the loan funding requirements of HHE and
had an option to increase its shareholding in HHE to 50%, which it failed to
exercise.
Effect on Competition
[5] Hulamin Operations is active in the manufacturing of aluminium rolled
products, and through HHE which manufactures aluminium extrusion
(particularly soft alloy extrusion products), also manufactures aluminium
extrusion.
[6] There is a limited overlap in the activities of the merging parties in the market
for aluminium extrusion in which they are both active due to their relationship;
i.e. HHE being a subsidiary of Hulamin Operations. Outside of this
relationship there is no overlap in the activities of the merging parties as
Hulamin Operations is involved in rolled products and HHE is involved in soft
alloy extrusion products.
[7] The proposed transaction will not result in any material change in the market
structure due to the pre-existing relationship between the merging parties,
neither will it increase nor affect market shares in the identified markets.
[8] In light of the above the Tribunal finds that the proposed transaction is
unlikely to substantially prevent or lessen competition.
Public Interest
[9] The transaction does not raise any significant public interest concerns.
___________________ 11 December 2008
D Lewis Date
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Y Carrim and T Orleyn concurring.
Tribunal Researcher: L. Xaba
For the merging parties: Brink Cohen Le Roux instructed by Cox Yeats
Attorneys
For the Commission: K Mahlakoana
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