COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 44/LM/May09
In the matter between:
Clidet No 907 (Pty) Ltd Acquiring Firm
and
Boxmore Plastics International (Pty) Ltd Target Firm
Panel : Y Carrim (Presiding Member), U Bhoola (Tribunal
Member) and M Mokuena (Tribunal Member)
Heard on : 21 July 2009
Order issued on : 21 July 2009
Reasons issued on : 02 September 2009
Reasons for Decision
Introduction
[1] On 21 July 2009 the Tribunal approved the acquisition by Clidet No 907 (Pty)
Ltd of Boxmore Plastics International (Pty) Ltd. The reasons follow below.
Parties
[2] The primary acquiring firm is Clidet No 907 (Pty) Ltd (“Holdco”), a company
registered under the laws of the Republic of South Africa. Holdco is
controlled by Pamodzi Investment Holdings (Pty) Ltd (“PIH”), which controls
firms in excess of 10 in South Africa.
[3] According to the merging parties, Holdco will hold 75% of the issued share
capital of a shelf company, Clidet No 906 (Pty) Ltd (“Newco”). The remaining
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shares will be held by Investec Bank Ltd (15%) and Management (10%). The
parties further submit that Newco will be jointly controlled by Holdco and
Investec due to certain minority protections on Investec’s 15% shareholding in
Newco. Investec is therefore the second primary acquiring firm (as a result of
its 15% shareholding and minority protections). No single shareholder
controls Investec and it has in excess of 20 subsidiaries in South Africa.
[4] The primary target firm is Boxmore Plastics International (Pty) Ltd (“Boxmore
Plastics”). Boxmore Plastics is jointly controlled by Boxmore International Ltd
(“Boxmore”), a company registered under the laws of the United States of
America, Chesapeake UK Acquisitions Ltd and Chesapeake Ltd, both
registered under the laws of the United Kingdom. Boxmore Plastics controls
Boxmore Cape (Pty) Ltd (“BC”) and Boxmore Plastics Mauritius Ltd (“BPM”).
Parties’ Activities
[5] PIH is an investment holding company with interests in various sectors
including food and beverages, information technology, industrial
manufacturing, financial services, mining/resources, automotive and leisure
industries. Investec is an international, specialist banking group that provides
investment banking, treasury and specialised finance, private client activities
and asset management.
[6] Boxmore Plastics is involved in the production and supply of polyethylene
terephthalate packaging (“PET”) containers and pre-forms. Its major
customers are Coca Cola Canners, Coca Cola SABCO, Valaque (SAB) and
Shoreline Beverages.
The transaction
[7] The merging parties submit that this transaction will take place in a series of
steps. The following are the steps relevant for purposes of evaluating the
transaction:
• Holdco’s acquisition of 100% of the issued share capital in Boxmore Plastics;
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• Newco’s acquisition of the businesses of Boxmore Plastics and Boxmore
Cape as going concerns and
• Newco’s acquisition of all shares in Boxmore Plastics (Mauritius) from
Boxmore Plastics.
Rationale
[8] PIH submits that this transaction represents an attractive opportunity to
expand its investment portfolio. The target firm submits that Chesapeake has
declared Chapter 11 bankruptcy and has agreed to sell the Boxmore Group
as part of its recovery plan.
Competition Analysis
[9] There is no overlap in the activities of the merging parties as PIH and
Investec do not have any interest in any firm involved in the manufacture of
PET packaging. This transaction is therefore unlikely to result in a substantial
lessening or prevention of competition in any market.
Public Interest
[10] The transaction does not raise any significant public interest concerns.
___________________ 02 September 2009
Y Carrim Date
U Bhoola and M Mokuena concurring.
Tribunal Researcher : I Selaledi
For the merging parties : Cliffe Dekker Hofmeyr Inc
For the Commission : K Mahlakoana
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