COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 08/LM/Jan12
In the matter between:
Super Group Dealerships, Acquiring Firm
a division of Super Groups Trading (Pty) Ltd
And
Auto Lux (Pty) Ltd and Motorview (Pty) Ltd Target Firm
Panel : Norman Manoim (Presiding Member)
Yasmin Carrim (Tribunal Member) and
Andreas Wessels (Tribunal Member)
Heard on : 01 March 2012
Order issued on : 01 March 2012
Reasons issued on : 09 March 2012
Reasons for Decision
Approval
1] On 01 March 2012 the Competition Tribunal (“Tribunal”) approved the
merger between Super Group Dealerships, a division of Super Group
Trading, a division of Super Group Trading (Pty) Ltd and two
companies, namely Auto Lux (Pty) Ltd and Motorview (Pty) Ltd. The
reasons for approving the proposed transaction follow below.
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Parties to the transaction
2] The primary acquiring firm is Super Group Dealerships (“SGD”), a
wholly-owned subsidiary of Super Group Trading (Pty) Ltd, a company
whose activities include the sale of new, pre-owned and demonstration
motor vehicles, the sale of spare parts, as well as the provision of
financial services.
3] There are two primary target firms in this matter. The first one is Auto
Lux (Pty) Ltd (“Auto Lux”), trading as CJD East Rand and Suzuki
Boksburg. Auto Lux is a Chrysler, Dodge, Jeep and Suzuki franchise
motor vehicle dealership in Boksburg. Auto Lux sells new, pre-owned
and demonstration motor vehicles, parts and accessories of the
abovementioned brands.
4] The second target firm is Motorview (Pty) Ltd (“Motorview”), trading as
Honda Bedfordview. Motorview sells new, pre-owned and
demonstration Honda motor vehicles, parts and accessories in
Bedfordview.
Proposed transaction
5] The proposed transaction involves SGD’s acquisition of the assets
utilised in the businesses of the target firms.
6] Upon implementation of the transaction, SGD will exercise sole control
over both the target firms.
Rationale for transaction
7] The rationale for the proposed merger is that the acquiring firm
identified Chrysler, Dodge, Honda, Jeep and Suzuki as growing motor
vehicle brands and as such, it feels that this transaction would be ideal
to further grow SGD’s representation within the Honda brand, as SGD
currently owns two Honda dealerships in the Gauteng Province.
Impact on competition
8] The proposed transaction will not result in a vertical overlap, however,
it will result in a horizontal overlap in the activities of the merging
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parties in respect of the sale of new passenger vehicles in the
Boksburg and Bedfordview areas.
9] The merging parties described a geographic market combining the
Boksburg and Bedfordview areas, although it was not clear what
boundaries these areas had. SGD holds approximately 4% of the
market share, whilst the target firm has approximately 5% of the market
share in the combined geographic market. Post-merger, the parties will
have a combined market share of below 10% relating to the sale of
new passenger vehicles in the Boksburg and Bedfordview areas.
10]The Commission also took the approach that the two areas formed part
of the same geographic market; however, they found it to be on a
broader basis. The Commission found that the post-merger market
share will be approximately 2.5% of the total market in the Midrand,
Boksburg, Bedforview, Edenvale and Randburg areas for the sale of
new passenger vehicles. Furthermore, the Commission submitted that
the post-merger market shares in respect of large and small SUVs will
be 16% and 10% respectively, the highest market shares in for the
various sub-categories of new passenger vehicles in the Midrand,
Boksburg, Bedforview, Edenvale and Randburg areas.
11]We need not decide which geographic market is correct, nor whether
the two markets ought to be defined narrower or separately given the
low post-merger market shares. Therefore, the transaction will not
substantially prevent or lessen competition in any relevant market.
12]More reliable is the fact that it appears in the Boksburg and
Bedfordview areas that there is sufficient rivalry between different
distributors. The merging parties submitted that all brands are well
represented within a three or four square kilometre radius of each other
in Boksburg. Albeit that Bedfordview is lesser of a motor town, there
are various other brand dealerships located in the vicinity of the
are various other brand dealerships located in the vicinity of the
particular Honda dealership in question. Therefore, there are sufficient
competitors in the relevant market.
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Public interest
13]The merging parties confirmed that there will be no adverse effect on
employment as a result of the proposed transaction. 1 No other public
interest issues arise as a result of this transaction.
CONCLUSION
14]We conclude that the proposed transaction is unlikely to substantially
prevent or lessen competition in any relevant market. Furthermore, the
proposed transaction raises no public interest concerns. Accordingly,
we approve the proposed merger unconditionally.
____________________ 09 March 2012
NORMAN MANOIM DATE
Yasmin Carrim and Andreas Wessels concurring.
Tribunal researcher: Nicola Ilgner
For the merging parties: Saskia Rohl of Super Group Dealerships
For the Commission: Zanele Hadebe
1 See page 50 of the record.
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