COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 93/LM/DEC09
In the matter between:
Bank of America Corporation
and
Barclays Bank Plc Acquiring Firm
And
Dywidag Systems International (Pty) Ltd Target Firm
Panel : N Manoim (Presiding Member),
Y Carrim (Tribunal Member)
and M Mokuena (Tribunal Member)
Heard on : 17/02/2010
Order issued on : 18/02/2010
Reasons issued on : 25/02/2010
Reasons for Decision
Approval
[1] On 18 February 2010 the Competition Tribunal approved the merger
between Bank of America Corporation (“Bank of America”), Barclays
Bank Plc (“Barclays”) and Dywidag Systems International (Pty) Ltd
(“DSI SA”). The reasons follow below.
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The Transaction
[2] In terms of the proposed transaction, Bank of America and Barclays
(via their respective subsidiaries) will each acquire an indirect
shareholding in the DSI Group. The transaction will result in Bank of
America and Barclays acquiring joint control over the DSI Group.
[3] The primary acquiring firms are Bank of America Corporation and
Barclays Bank Plc.
[4] The target firm is DSI International Luxembourg S.A.R.I (“DSI
International”) (and all companies controlled by it – referred to as the
“DSI Group” for ease of reference) - whose ultimate principal
shareholder is Tension Holdings S.A. (incorporated in the Grand
Duchy of Luxembourg) . Tension Holdings S.A. is in turn controlled by
CVC European Equity Partners Fund IV (“CVC”) and its affiliates.
[5] DSI International has joint control of the following firms in South Africa:
• Dywidag Systems International (Pty) Ltd in which it holds a 50%
interest. The remaining 50% shareholding in the DSI SA is held
by Capital African Steel (Pty) Ltd.
• DSI SA holds an 80% shareholding in FSI Mandrik Strata
Support (Pty) Ltd.1
[6] The transaction can be broken down as follows, post transaction
Barclays will hold approximately 46% through two of its subsidiaries
and Bank of America will have approximately 43% through one of its
subsidiaries, CVC will have a shareholding of approximately 5% and
management a combined shareholding of approximately 5%. These
will be held in a company called Brandlen Finance S.A., a newly
incorporated Luxembourg entity, which will have a company called Bolt
2 S.A. as a wholly owned subsidiary. DSI International Luxembourg
will, in turn, be a wholly owned subsidiary of Bolt 2 SA.
The parties and their activities
[7] Although the Bank of America itself has no physical presence in South
Africa, its subsidiary Merrill Lynch, is involved in the local investment
Africa, its subsidiary Merrill Lynch, is involved in the local investment
banking market. Barclays Bank is a global financial services provider
engaged in retail and commercial banking. It conducts these services
in South Africa through its relationship, as majority shareholder, with
ABSA Bank. DSI produces and supplies high quality products for the
mining and construction industry. DSI SA’s activities are confined to the
production, sale, and instillation of a variety of products which are used
in underground mining such as rock and roof bolts, expansion shells,
friction bolts and rock bolt accessories.
1 See CC4(2) of DSI International Luxembourg S.A.R.I. specifically items 2 and 4 of page 64.
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The relevant market and the impact on competition
[8] The relevant market is the manufacture and supply of mining products
and the relevant geographic market is South Africa. The acquiring firms
are not active in this market.
[9] There is thus no overlap in the products and services supplied by the
merging parties.
CONCLUSION
[10] There are no significant public interest issues and we
accordingly approve the transaction.
____________________ 24/02/2010
N Manoim DATE
Concurring: Y Carrim and M Mokuena
Tribunal Researcher: Thandi Lamprecht
For the merging parties: Nortons Inc
For the Commission: Nazeera Ramroop
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