COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 54/LM/Aug10
In the matter between:
MOGS (Pty) Ltd Acquiring Firm
And
Trident South Africa (Pty) Ltd Target Firm
Panel : Norman Manoim (Presiding Member)
Yasmin Carrim (Tribunal Member)
Andreas Wessels (Tribunal Member)
Heard on : 13 October 2010
Order issued on : 13 October 2010
Reasons issued on : 09 November 2010
Reasons for Decision
Approval
1] On 13 October 2010, the Competition Tribunal (“Tribunal”)
unconditionally approved the acquisition the merger between MOGS (Pty) Ltd
and Trident South Africa (Pty) Ltd. The reasons for approving the transaction
follow.
The parties and their activities
2] The primary acquiring firm is MOGS (Pty) Ltd (“MOGS”), a company
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incorporated under the company laws of the Republic of South Africa. MOGS
is controlled by Royal Bafokeng MOGS (Pty) Ltd, a company part of a group
of entities which fall under Royal Bafokeng Holdings (Pty) Ltd (“RBH”) (all
these are referred to as the acquiring group).
MOGS provides various services to the mining (coal, gold and platinum), oil
and gas sector. Amongst other things, the services include the provision of
drilling services, pipeline rehabilitation, intervention and maintenance
services, consulting and engineering services, electrical services and
geological and environmental services.
3] The primary target firm is Trident South Africa (Pty) Ltd (“Trident SA) a
company incorporated under the company laws of the Republic of South
Africa. Trident SA is a designer, manufacturer and supplier of mining and
engineering machinery in the mining sector. It specialises in the provision of
four distinct product types 1 and also conducts business with the view of
providing products solely suitable for hard-rock, underground, rail-bound
mines (i.e. not coal or salt mines).
Trident SA also produces spare and replacement parts for its machinery and
renders repair services of worn out equipment. The repair work is done on a
monthly basis for various mining houses which have previously bought the
products.
The proposed transaction
4] MOGS is to acquire a controlling interest (shares) in Trident SA from its
existing shareholders.
Relevant markets and impact on competition
5] The activities of the merging parties do no overlap as no firm in the
acquiring group is active or provides the services provided by the target firm.
6] There is however a vertical relationship between the merging parties.
This is because the primary target firm supplies mining machinery and
equipment to firms within the acquiring group structure. The primary target
firm has previously sold machinery and equipment to the primary acquiring
firm has previously sold machinery and equipment to the primary acquiring
group. These sales represented less than 10% of the target firm’s total
1 Loaders, locomotives, winches and DC traction motors.
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revenue generated from the sale of machinery and equipment and of the total
revenue.
The acquiring firm has significant market shares in the manufacture of mining
machinery. However, it was found that this market has the presence of
sufficient effective competitors to curb any anti competitive behaviour by the
merged entity.
Public interest
7] No public interest concerns arise as a result of this proposed
transaction.
Conclusion
8] The proposed transaction is approved without conditions since it is
unlikely to substantially prevent or lessen competition in any potential relevant
market.
DATE: 09 November 2010
Yasmin Carrim
Norman Manoim and Andreas Wessels concurring
Tribunal Researcher : Mahashane Shabangu
For the merging parties: H B Senekal and Amy van Buuren of Edward
Nathan Sonnenbergs Inc
For the Commission : Mogalane Matsimela of the Mergers and
Acquisitions Division
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