COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 58/LM/Aug09
In the matter between:
Tsogo Sun Gaming (Pty) Ltd Acquiring Firm
And
The Millennium Casino Limited Target Firm
Panel : Y Carrim (Presiding Member)
N Theron (Tribunal Member)
A Wessels (Tribunal Member)
Heard on : 07/10/2009
Order issued on : 07/10/2009
Reasons issued on : 04/02/2010
Reasons for Decision
Approval
[1] On 7 October 2009 the Competition Tribunal (“Tribunal”) unconditionally
approved the merger between the above-mentioned parties. The reasons for
approval follow below.
Parties and their activities
[2] The primary acquiring firm is Tsogo Sun Gaming (Pty) Ltd (“Tsogo Gaming”), a
wholly owned subsidiary of Tsogo Sun Holdings (Pty) Ltd (“Tsogo Holdings”).
Tsogo Investment Holding Company (Pty) Ltd (“Tsogo Investment“) holds 51% of
the issued share capital of Tsogo Holdings; SABMiller plc (“SABMiller“) holds the
remaining 49%. Tsogo Investment is controlled by Hosken Consolidated
Investments Limited (“HCI”), a public company listed on the JSE Limited.
[3] The Tsogo Sun group’s activities relate to casinos (offering gaming, dining,
entertainment and conference facilities) and hotels. HCI is an investment holding
company; its principal areas of investment involve gaming, hotels and leisure;
1
media and broadcasting; transport; energy; property and exhibitions; industrial;
food and beverage; and clothing and textiles. SABMiller’s interests relate to
brewing, bottling and distribution.
[4] The primary target firm is The Millennium Casino Limited (“Millennium”), a wholly
owned subsidiary of Johnnic Holdings Limited (“Johnnic”). Johnnic, in turn, is a
wholly owned subsidiary of HCI. Millennium has a 74.67% shareholding in
Durban Add-Venture Limited (“Durban Add-Venture”) and a 60% shareholding in
Adventure World Management (Pty) Ltd (“Adventure World Management“) 1.
According to the merging parties, Millennium’s only real asset is its indirect 2 40%
shareholding in Tsogo Sun KZN (Pty) Ltd (“Tsogo Sun KZN”). Tsogo Gaming
indirectly holds the remaining 60%, i.e. majority, shareholding in Tsogo Sun KZN
and therefore has control of Tsogo Sun KZN, according to the merging parties.
[5] Millennium, Durban Add-Venture and Adventure World Management are purely
holding companies and provide no services. Tsogo Sun KZN owns and operates
the Suncoast Casino in Durban.
Proposed transaction
[6] In terms of the proposed transaction, Tsogo Gaming intends to acquire the entire
issued share capital of Millennium from Johnnic. Consequently Tsogo Gaming
will post merger wholly own Tsogo Sun KZN. The proposed transaction is
principally an internal restructuring within the HCI group of companies which
consolidates HCI’s indirect shareholding in Tsogo Sun KZN in Tsogo Gaming.
Rationale for the transaction
[7] According to the merging parties, the proposed transaction will enable the HCI
group to manage its casino interests optimally through a single entry point, being
Tsogo Investment.
Competition analysis
[8] The only overlap between the activities of the merging parties in any relevant
market relates to their joint shareholding in Tsogo Sun KZN. As stated in
market relates to their joint shareholding in Tsogo Sun KZN. As stated in
paragraph 6 above, the proposed transaction is effectively an internal
restructuring and Tsogo Sun KZN is already indirectly controlled by Tsogo
1 Adventure World Management holds 0.39% of the shares in Durban Add-Venture.2 Through its subsidiary Durban Add-Venture.
2
Gaming premerger. As such, competition is not substantially prevented or
lessened in any relevant market as a result of this proposed deal.
CONCLUSION
[9] The Tribunal concludes that the proposed transaction is unlikely to substantially
prevent or lessen competition in any relevant market. Furthermore, no public
interest concerns arise from this transaction. Therefore, the proposed transaction
is approved unconditionally.
____________________ 04/02/2010
A Wessels DATE
Y Carrim and N Theron concurring
Tribunal Researcher: Londiwe Senona
For the merging parties: Nortons Inc.
For the Commission: M Matsimela (Mergers & Acquisitions)
3