COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No:109/LM/Dec11
[013771]
In the matter between:
Curro Holdings Ltd Acquiring Firm
And
The Rudell Holdings Trust (Pty) Ltd, in Target Firm
respect of Woodhill College (Pty) Ltd and
Woodhill College Property Holdings (Pty) Ltd
Panel : Yasmin Carrim (Presiding Member)
Medi Mokuena (Tribunal Member)
Takalani Madima (Tribunal Member)
Heard on : 14 March 2012
Order issued on : 14 March 2012
Reasons issued on : 29 June 2012
Reasons for Decision
Approval
[1] On 14 March 2012 the Competition Tribunal (“Tribunal”) unconditionally
approved the acquisition by Curro Holdings Ltd of the Rudell Holdings
Trust, in respect of Woodhill College (Pty) Ltd and Woodhill College
Property Holdings (Pty) Ltd. The reasons for the approval follow below.
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Parties and their activities
[2] The primary acquiring firm is Curro Holdings Ltd (“Curro”), a public
company listed on the Johannesburg Securities Exchange (“JSE”). Curro
is controlled by PSG Financial Services Ltd (“PSG”). PSG is a wholly
owned subsidiary of PSG Group Ltd. Curro has the following wholly owned
subsidiaries: Curro Langebaan (Pty) Ltd, Florauna Akademie (Pty) Ltd,
Aurora College (Pty) Ltd and Point 100 Bush Hill (Pty) Ltd.
[3] Curro provides services in relation to private education. It has six schools
In Gauteng, two in Mpumalanga, one in Limpopo and four in the Western
Cape. These schools accommodate pupils from Grade RR to Grade 12.
Curro also caters for early childhood development centres for children
from six months to four years (play schools) and offers aftercare facilities.
[4] The primary target firm is the Rudell Holdings Trust (the “Trust”), a trust
registered in terms of the laws of the Republic of South Africa. The Trust is
controlled by these trustees: Mr. Martin Christo van Breda, Ms Teresa
Jacoba van Breda and Mr. Daniel Athol Bosman. The only business of the
Trust that will be acquired by Curro is in relation to Woodhill College (Pty)
Ltd and Woodhill College Property Holdings (Pty) Ltd.
[5] Woodhill College operates a co-educational, independent, non-
denominational Christian school for learners from Grade 0 to Grade 12. It
consists of three schools namely, Woodhill College Foundation School
(Grade 0 to one), Woodhill College Preparatory School (Grade 1 to Grade
6) and Woodhill College High School (Grade 7 to Grade 12).
[6] Woodhill College Property is the company vehicle which owns the
immovable property on which Woodhill College is operated. Woodhill
College and Woodhill College Property are hereinafter referred to as
“Woodhill College”.
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Description of the transaction
[7] Curro intends to acquire the entire issued ordinary capital of Woodhill
College. Upon completion, Woodhill College will be solely controlled by
Curro.
Rationale for the transaction
[8] Curro submitted that the proposed transaction will assist it in extending its
footprint by adding another reputable school to its network. The Trust
submitted that it wants to sell its interest in Woodhill and Curro represents
an educational-focused purchaser.
The relevant markets and impact on competition
[9] The Commission identified a horizontal overlap in the activities of the
merging parties in respect of the provision of independent education
(primary, secondary and combined schools) in Pretoria East, Pretoria.
Although both parties offer independent education, the Commission found
that they do not constrain each other because they operate at different
levels of the market i.e. Woodhill College operates at the upper end of the
private school market whereas Curro operates at the middle end and that
the average difference between school fees paid at the two schools is
approximately 44%.
[10] The Commission, however, adopted a worst case scenario and assessed
the effects of the proposed transaction on the broader private schools
market within the Pretoria East area. The combined post-merger market
shares of the merging parties are as follows:
• Primary schools – 24%;
• Secondary schools – 15%; and
• Combined schools – 25%.
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[11] The merging parties will still continue to face competition from schools
such as Cornerstone College, Cornwall Hill College, Crawford College,
Abbot College, Loreto School, St Albans College, Waterkloof House,
Eduplex and Tuksport High School.
[12] The Commission found that parents of learners have some degree of
countervailing power as they are able to switch to other schools (such as
those mentioned above) which are situated within close proximity of
Woodhill and Curro. Further, schools competing with those of the merging
parties as well as parents of the learners at Woodhill and Curro did not
raise any concerns about this transaction.
Public interest
[13] The merging parties submitted to the Commission that the proposed
transaction will not have any significant effect on employment.
Conclusion
[14] In light of the above, we conclude that the proposed transaction is
unlikely to substantially prevent or lessen competition in the market for the
provision of independent education. Furthermore, the proposed
transaction raises no public interest concerns. Accordingly we approve the
transaction unconditionally.
____________________ 29 June 2012
Yasmin Carrim Date
Medi Mokuena and Takalani Madima concurring.
Tribunal researcher: Ipeleng Selaledi
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For the merging parties: Natalie Von Ey of Cliffe Dekker Hofmeyr Inc.
For the Commission: Lerato Monareng
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