COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 64/LM/JUN12
(015230)
In the matter between:
Super Group Dealerships, a division of Acquiring Firm
Super Group Trading (Pty) Ltd
And
Zingaro Trade 112 (Pty) Ltd Target Firm
Panel : Yasmin Carrim (Presiding Member),
Andreas Wessels (Tribunal Member)
Andiswa Ndoni (Tribunal Member)
Heard on : 25 July 2012
Order issued on : 25 July 2012
Reasons issued on : 08 August 2012
Reasons for Decision
Approval
1] On 25 July 2012 the Competition Tribunal (“Tribunal”) unconditionally
approved the large merger between Super Group Dealerships - a division
of Super Group Trading (Pty) Ltd - and Zingaro Trade 112 (Pty) Ltd. The
reasons for approving the proposed transaction follow below.
1
Parties to transaction
2] The primary acquiring firm is Super Group Dealerships (“SGD”), a division
of Super Group Trading (Pty) Ltd (“Super Group”) which is a firm
incorporated in terms of the company laws of the Republic of South Africa.
Super Group is a wholly owned subsidiary of Super Group Holdings (Pty)
Ltd which in turn is controlled by Super Group Limited, a public company
listed on the Johannesburg Securities Exchange. Super Group Limited is
not controlled by another firm.
3] The primary target firm is Zingaro Trade 112 (Pty) Ltd (“Zingaro”) which
trades as Nash Nissan, and is a firm incorporated in terms of the company
laws of the Republic of South Africa. Zingaro is wholly owned by Mr Harold
Bromberg.
Activities of merging parties
4] SGD controls and operates vehicle dealerships in the Gauteng and the
North West provinces which sell and service the following brands of
vehicles: Toyota, Mercedes Benz, Chrysler Jeep, Dodge, General Motors,
Isuzu, Honda, Nissan, Land Rover, Jaguar, Lexus, Volvo, Suzuki, Renault,
Ford and Mazda. SGD’s dealerships sell new, pre-owned and
demonstration vehicles, and spare parts and accessories for the
aforementioned brands. They also provide intermediary vehicle finance
and insurance services.
5] Nash Nissan is a car dealership located in Alberton. Its activities involve
selling new, pre-owned and demonstration Nissan vehicles, servicing
Nissan vehicles, and selling Nissan accessories and spare parts. It also
provides intermediary vehicle finance and insurance services.
Proposed transaction and rationale for transaction
6] The proposed transaction entails SGD acquiring all the fixed assets,
intellectual property, inventories and all other assets used in the operation
of Nash Nissan. Post-transaction, Nash Nissan will thus be wholly owned
by SGD.
2
7] According to SGD the transaction will enable it to expand its business in
Gauteng where the majority of South Africa’s new motor vehicle sales
occur. SGD has no representation in Alberton and the acquisition of Nash
Nissan will expand its footprint into Alberton.
8] From Zingaro’s perspective, the company’s sole shareholder wishes to
retire and realise his investment.
Relevant markets and impact on competition
Horizontal Analysis
9] The Commission found that there is a horizontal overlap in the activities of
the merging parties in relation to the sale of Nissan passenger and light
commercial vehicles. The Commission decided that the market for the sale
of pre-owned vehicles did not require detailed analysis because it has
previously been held that that market is competitive as it is characterised
by low barriers to entry and many sources of supply. 1 The Commission
thus defined the relevant markets as the markets for the sale of new
passenger vehicles and light commercial vehicles in the East
Rand/Alberton area.
10]The Commission found that the merging parties’ combined post-merger
market shares in the relevant markets are 2.9% for passenger vehicles
and 1.1% for light commercial vehicles. We thus agree with the
Commission’s conclusion that the transaction is unlikely to lead to a
substantial lessening or prevention of competition because the post-
merger market shares are low.
Public Interest
11]The merging parties submitted that the proposed transaction will have no
adverse effects on employment since they do not foresee any
retrenchments as a result of the merger. 2 No other public interest issues
arise due to this transaction.
1 Unitrans Motors (Pty) Ltd / Weiss Motors (Pty) Ltd, case number: 77/LM/Aug05
2See page 46 of the Record
3
Conclusion
12]Having regard to the facts above, we find that the proposed merger is
unlikely to substantially lessen or prevent competition in any relevant
markets. Furthermore, the proposed transaction raises no public interest
concerns. Accordingly, we approve the merger unconditionally.
____________________ 08 August 2012
Yasmin Carrim DATE
A Wessels and A Ndoni concurring
Tribunal Researcher: Elizabeth Preston-Whyte
For the merging parties: Saskia Rohl, the Chief Financial Executive of
Super Group Dealerships
For the Commission: Dineo Mashego and Lindwe Khumalo
4