COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 76/LM/Sep11
In the matter between:
Business Venture Investments Acquiring Firm
And
Vox Telecom Limited Target Firm
Panel : Norman Manoim (Presiding Member)
Yasmin Carrim (Tribunal Member)
Andreas Wessels (Tribunal Member)
Heard on : 12/10/2011
Order issued on : 12/10/2011
Reasons issued on : 18/10/2011
Reasons for Decision
APPROVAL
1] On 12 October 2011 the Competition Tribunal (“Tribunal”) unconditionally
approved the proposed transaction between Business Venture Investments
(“Bidco”) and Vox Telecom Limited (“Vox”). The reasons for approval of the
proposed transaction follows below.
THE TRANSACTION
2] This deal is essentially a private equity transaction in terms of which Bidco, the
primary acquiring firm, intends to acquire the entire issued share capital in Vox,
the primary target firm. This will result in Bidco controlling Vox post merger.
3] Bidco is a newly formed entity which is jointly controlled by Lereko Metier Trustees
which through its subsidiaries provides a number of services including, electronics,
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property investment and letting, fast moving consumer goods, as well as import and
distribution of medical equipment to the medical industry, and Investec Bank, an
international specialist bank and asset manager which provides a range of financial
products and services.
4] Vox controls a number of companies that are active in the telecommunications
industry, and is a telecom operator that provides internet, voice and data services.
THE RATIONALE
5] For the acquiring group, this transaction is an ideal move to grow its investment in a
company which is perceived to have a good future prospect. For the target firm, this
is an opportunity to realise its investment.
COMPETITION ASSESSMENT
6] The Commission found that there is no horizontal overlap in the activities of the
merging parties as they do not provide the same services and are not actual or
potential competitors. However given Investec’s shareholding in Glocell, we inquired
about the potential competitive overlap between Glocell and Vox. Murray Steyn from
Vox stated that Vox purchases some services from Glocell, but nevertheless
confirmed that there is no competition between the two as they do not provide the
same services since Glocell sells SIMs to the consumer market while Vox provides
SIMs to the corporate market.
7] In respect to the vertical relationship between the merging parties, the Commission
took into account the fact that Vox provides some services to Investec. 1 Additionally,
the Commission said that Vox provided services to firms controlled by Lereko
Metier.2 However, the Commission found that the vertical overlap is minimal as it
accounts for only about 0.0027% of Vox’s annual turnover. Furthermore, the
Commission also said that the telecommunications sector is constantly changing
which makes it unlikely for the merging parties to control the market.
8] Given that the vertical integration is very minimal, it makes it unlikely for the merging
8] Given that the vertical integration is very minimal, it makes it unlikely for the merging
1 Investec has 25% stake in MSG Africa which is involved in email security, web security, email hosting and email archiving,
and also has 20% stake in Tsiya Group which is in the process of acquiring MB Technologies which is involved in sale of IT
equipment, particularly PCs.
2 i.e. Inhep Electronics for data line and Orley Foods for ADSL interconnectivity, managed voice and call manager.
parties to engage in any foreclosure strategy.
PUBLIC INTEREST
9] This deal does not give rise to any public interest issues.
CONCLUSION
10] We therefore conclude that the proposed transaction is unlikely to substantially
prevent or lessen competition in any of the relevant identified markets as there is no
horizontal overlap and the vertical integration is negligible.
____________________ 18/10/2011
N Manoim Date
Y Carrim and A Wessels concurring
Tribunal Researcher: Londiwe Senona
For the merging parties: Cliffe Dekker Hofmeyr for the Acquiring Firm and Webber
Wentzel for the Target Firm
For the Commission: Bheki Masilela
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