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COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 92/LM/Oct12
015735
In the matter between:
Imperial Logistics Acquiring Firm
A division of Imperial Holdings Limited
And
KWS Carriers CC Target Firm
Panel : Yasmin Carrim (Presiding Member),
Medi Mokoena (Tribunal Member)
Takalani Madima (Tribunal Member)
Heard on : 21 November 2012
Order issued on : 21 November 2012
Reasons issued on : 03 December 2012
Reasons for Decision
Approval
[1] On 21 November 2012 the Competition Tribunal (“ Tribunal”) approved
the merger between Imperial Logistics (“Imperial Lo gistics”), a division
of Imperial Holdings Limited (“Imperial Holdings”), the primary acquiring
firm, and KWS Carriers CC (“KWS”), the primary target firm.
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[2] The reasons for approving the proposed transaction follow below.
Parties to transaction
[3] The primary acquiring firm is Imperial Holdings . The Imperial business
is divided into five divisions with Imperial Logist ics being the relevant
one for the proposed transaction.
[4] Imperial Logistics is a logistics and supply ch ain company that focuses
on delivering end-to-end logistics and supply chain management
services to customers across a range of inductors f rom retail, petro-
chemical, construction, mining and minerals, to aut omotive, chemical,
technology ,agriculture and forestry.
[5] The target firm is KWS which operates a logistics business that focuses
on the movement of bulk commodities from the source to end users
and harbours for export. KWS’s main customers for l ogistics
associated with dry bulk commodities participate in the ore and metallic
minerals sector.
Proposed transaction and rationale
[6] The merging parties submit that the transaction involves the acquisition
of a total of 60% shareholding of issued shares in KWS by Imperial
Logistics.
[7] Imperial Logistics submits that the proposed transaction will broaden its
footprint and exposure in an area of the mining ind ustry in which it has
little or no involvement i.e. the provision of logi stics services to alloys,
ores, manganese, chrome and related mineral sectors.
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[8] From KWS’s perspective the proposed transaction will present KWS
with various opportunities predominantly arising fr om access to
Imperial Logistics’ larger resources such as “known -how”, capital and
1 See competitiveness report submitted by merging parties page 51.
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purchasing power as Imperial Logistics has a sound and well
established brand in the logistics business in South Africa.
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The relevant market and the impact on competition
[9] The parties agreed with the Competition Commiss ion’s (“Commission”)
submission that there is a horizontal overlap in th e activities of the
merging parties in respect of the provision of tran sportation for dry bulk
commodities. Geographically these activities do not overlap as KWS
mostly operates in the Northern Cape region, and Im perial Logistics in
the greater Mpumalanga and Limpopo regions respecti vely. This
however does not constrain the merging parties from tendering
business throughout the country.
[10] The Commission’s assessment of the market conf irmed that post
merger the merging parties will have a market share of less than15 %
for the provision of transportation for dry bulk co mmodities.3 This
means that the merging entities post merger, will f ace sufficient
competition from other competitors in the market.4
[11] Although there is vertical overlap in the acti vities of the merging
parties, the Commission confirmed that such overlap is of little
significance and as a result, will not have any neg ative impact on
competition in the relevant market.5
[12] Therefore, we conclude that the transaction is unlikely to substantially
prevent or lessen competition in any relevant market.
Public interest
[13] The merging parties submitted that the propose d transaction will not
result in any job losses and as a result will have no impact on public
interest.6
2 See merger record page 52.
3 See page 2 of transcript hearing.
4 See merger record pages 61, 62 and 65.
5 See page 2 of transcript of hearing.
6 See merger record pages 49-50 and 65.
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CONCLUSION
[14] We unconditionally approve the merger.
____________________ 03 December 2012
Yasmin Carrim DATE
Medi Mokuena and Takalani Madima concurring.
Tribunal researcher: Caroline Sserufusa
For the merging parties:
Anton Roets of Nortons Inc
For the Commission: Zanele Hadebe