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COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No:
93/LM/Oct12
In the matter between:
Barloworld Logistics (Pty) Ltd
Acquiring Firm
And
Manline (Pty) Ltd
Target Firm
Panel : Norman Manoim (Presiding Member)
Yasmin Carrim (Tribunal Member)
Andreas Wessels (Tribunal Member)
Heard on : 05 December 2012
Order issued on : 05 December 2012
Reasons issued on : 21 January 2013
Reasons for Decision
Approval
[1] On 05 December 2012 the Competition Tribunal (“ Tribunal”) approved
the merger between Barloworld Logistics (Pty) Ltd a nd Manline (Pty)
Ltd. The reasons for approval follow below.
Parties and their activities
[2] The primary acquiring firm is Barloworld Logist ics (Pty) Ltd (“Barloworld
Logistics”), a private company incorporated in term s of the laws of the
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Republic of South Africa. Barloworld Logistics is l argely a holding
company and its wholly owned subsidiary, Barloworld Logistics Africa
(Pty) Ltd is the operational company. All of the or dinary shares of
Barloworld Logistics are held by Barloworld Investm ents (Pty) Ltd, a
wholly owned subsidiary of Barloworld Limited.
[3] The Barloworld Group provides integrated rental , fleet management,
product support and logistics services and solution s. It provides a link
between manufacturers and customers and adds value through sales,
after-market support and solutions to customers.
[4] The primary target firm is Manline (Pty) Ltd (“ Manline”), a private
company incorporated in terms of the laws of the Re public of South
Africa.
[5] Manline is a logistics group providing line-hau l transportation and
supply chain services throughout Southern Africa, a s well as
warehousing and distribution services in certain re gions of South
Africa. Its line-haul logistics services are provid ed to customers in the
fast moving consumer goods; mining; agriculture; ti mber and forestry;
and fuel and chemicals industries. According to the merging parties,
line-haul refers to the transportation, usually by truck, of heavy loads of
freight for long distances or generally between cities.
Proposed transaction and rationale
[6] In terms of the proposed transaction Barloworld Logistics plans to
acquire 50.1% of the share capital of Manline and B arloworld Logistics
further plans to transfer the businesses of its Ded icated Transport
Services (“DTS”) division and Ecosse Tankers (Pty) Ltd
1 to Manline.
[7] Barloworld Logistics considers the proposed acq uisition as an excellent
strategic and cultural “fit” to its business. The m erging parties further
see their activities as complementary which will al low them to deliver
better supply chain solutions to their customers. I n addition, Barloworld
1 The merging parties submitted that Barloworld Logistics owns Ecosse, but this company is
effectively managed by the DTS division.
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believes that through the proposed transaction the parties will be able
to present more innovative solutions to customers a nd anticipates that
this will increase the efficient use of Barloworld’ s dedicated road
transport capabilities by combining Barloworld’s DT S business with
Manline’s line-haul logistics business, where appropriate.
[8] Manline considers that the proposed transaction will allow it to provide
a holistic service to its customers.
Competition assessment
[9] The merging parties were of the view that their activities do not overlap
directly since they provide different types of logi stics services, which
are complementary in nature rather than substitutab le. They submitted
that Barloworld (specifically the DTS business) pro vides dedicated
transportation services that are customised per cli ent and per
application (typically within a 120 km radius) whic h are distinguishable
from Manline’s line-haul transportation services (l ong distance and
cross-border transport services) provided to multip le customers in
specific sectors.
[10] The Commission however found that the activiti es of the merging
parties overlap in a potential (broad) national mar ket for the provision
of logistic services. The combined market share of the merging parties
in this market in 2011/2012 will be less than 10%. There is however in
this case no need for us to take a definitive view on the exact
parameters of the relevant market(s). We note that none of the merging
parties’ customers contacted by the Commission duri ng its market
investigation raised any concerns with regards to t he proposed
transaction. Furthermore, the existing limited vert ical relationship
between the merging parties is unlikely to raise foreclosure concerns.
[11] Conclusion: we are satisfied that the proposed transaction is unlikely
to substantially prevent or lessen competition in any relevant market.
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Public interest
[12] The Commission found that no significant publi c interest issues arise
as a result of the proposed transaction.
CONCLUSION
[13] We approve the proposed transaction without conditions.
____________________ 21 January 2013
Andreas Wessels DATE
Norman Manoim and Yasmin Carrim concurring
Tribunal researcher: Thabo Ngilande
For the merging parties:
Bowman Gilfillan Inc.
For the Commission: Zanele Hadebe