COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No:18/LM/Feb12
In the matter between:
Kagiso Media Limited Acquiring Firm
And
Juta & Company Ltd, Imfundo Investments
(Pty) Ltd and Juta Investments (Pty) Ltd Target Firm
Panel : Norman Manoim (Presiding Member),
Yasmin Carrim (Tribunal Member)
and Andreas Wessels (Tribunal Member)
Heard on : 15 May 2012
Reasons issued on : 25 June 2012
Reasons for Decision
Approval
[1] On 15 May 2012 the Competition Tribunal (“Tribunal”) unconditionally
approved the merger between Kagiso Media Limited and Juta and
Company Limited, Imfundo Investments (Pty) Ltd and Juta Investments
(Pty) Ltd. The reasons for approval follow below.
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The Transaction
[2] The primary acquiring firm is Kagiso Media Limited (“Kagiso”), a
company listed on the Johannesburg Stock Exchange having its
principal place of business in Johannesburg. Kagiso is directly
controlled by Kagiso Tiso Holdings (Pty) Ltd (“KTH”) through a 51%
shareholding interest in Kagiso. KTH is not directly or indirectly
controlled by any firm.
[3] The primary target firms are Juta and Company Limited (“Juta&Co”),
Imfundo Investments (Pty) Ltd (“Imfundo”) and Juta Investments (Pty)
Ltd (“Juta Investments”) hereinafter referred to collectively as the
“target firms.” The transaction has been considered by the merging
parties as one indivisible transaction as there is, amongst other factors,
a common shareholding between Juta&Co, Imfundo and Juta
Investments.
The Rationale
[4] Kagiso’s rationale for this transaction is that Juta&Co is a strategic
investment in line with its growth and profitability objectives and that
this transaction will therefore offer opportunities in South Africa and in
other African countries.
[5] The target firms are of the view that this transaction will consolidate the
shareholding in Juta&Co which will enable the merged firm to have
better access to funding for its growth projects and be better placed to
expand its product capabilities and services into countries outside
South Africa.
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The relevant market and the impact on competition
[6] Kagiso is active in the provision of entertainment and broadcasting
services, including but not limited to, operating radio stations in South
Africa. Imfundo and Juta Investments are investment holding
companies that do not conduct any activities. Their only assets are the
shares in Juta&Co.
[7] Juta&Co is active in the legal and educational publications, academic
and professional development, adult learning and retail academic
markets. One of its competitors is Van Schaik Bookstores which is a
subsidiary of Avusa Limited (Avusa). Kagiso holds minor stake in
Avusa of less than one percent and is not represented on its board of
directors. It thus cannot anyway be considered to be able to control,
influence of exchange information in respect of Van Schaik and hence
we can conclude that no horizontal overlap exists.
[8] Kagiso was previously a joint controller of the Butterworths business
(now Lexis Nexis) a rival book publisher to Juta&Co but has since sold
this stake and is no longer subject to any restraint of trade in respect of
that business.
[9] This transaction is therefore unlikely to substantially change the market
dynamics in which Juta&Co and Kagiso operates.
[10] The Commission is of the view that the proposed transaction is
unlikely to substantially prevent or lessen competition in South Africa, a
conclusion we agree with.
CONCLUSION
[11] There are no significant public interest issues and we accordingly
approve the transaction without conditions.
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____________________ 25 June 2012
N Manoim DATE
Y Carrim and A Wessels concurring.
Tribunal Researcher: Thabo Ngilande
For the merging parties: Werksmans Attorneys
For the Commission: Lebohang Molefe
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