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COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No:
016220
In the matter between:
TP Hentiq 6132 (Pty) Ltd
Acquiring Firm
And
Sectional Poles Business Division of
Target Firm
Harrison & White Investments (Pty) Ltd
Panel : Norman Manoim (Presiding Member)
Andreas Wessels (Tribunal Member)
Medi Mokuena (Tribunal Member)
Heard on : 13 March 2013
Order issued on : 14 March 2013
Reasons issued on : 05 April 2013
Reasons for Decision
Approval
1. On 14 March 2013 the Competition Tribunal (the “ Tribunal”)
unconditionally approved the acquisition by TP Hent iq 6132 (Pty) Ltd
(“Newco”) of the business division of Harrison & Wh ite Investments (Pty)
Ltd (“H&W”), namely, Sectional Poles (“Sectional Poles”).
2. The reasons for the approval of the transaction follow below.
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Parties and their activities
3. The primary acquiring is Newco, a firm incorpora ted in terms of the laws of
the Republic of South Africa. Newco is controlled b y Corvest 7 (Pty) Ltd
(“Corvest”), which is in turn controlled by RMB Cor vest (Pty) Ltd (“RMB
Corvest”).
1 RMB Corvest is controlled by FirstRand Investment Holdings
Ltd (“FirstRand Investment”), which is ultimately c ontrolled by FirstRand
Ltd (“FirstRand”).
4. Newco is a newly incorporated entity and as such does not provide any
products and/or services. Corvest is the investmen t arm of RMB Corvest
and was established to hold shares and acquire inve stments. It has
interests in firms that operate across a broad rang e of categories including
industrial, services, retail and consumer, health c are and finance.
FirstRand is an integrated financial services group that is active in retail
banking, investment banking, corporate banking, pri vate banking, life
insurance, health insurance, asset management, empl oyee benefits and
short-term insurance.
5. The primary target firm is Sectional Poles, a wh olly owned business
division of H&W. Sectional Poles is involved in des igning, manufacturing
and supplying masts, poles and towers to the lighti ng and the
telecommunications industries.
1 RMB Corvest holds 66.7% in Corvest 100 (Pty) Ltd ( “Corvest 100”). Corvest 100 holds
preference shares in Shalamuka Fund Manager (Pty) L td (“Shalamuka Fund”), entitling it to
48.98% of the economic interest in Shalamuka Fund. Shalamuka Fund owns shares in
Shalamuka Capital (Pty) Ltd (“Shalamuka Capital”) t hat entitles it to 50.26% of the economic
benefits of Shalamuka Capital, with the balance own ed by Corvest 100 through a preference
share structure. Shalamuka Capital holds 22% of the shares in Newco and as RMB Corvest
controls Shalamuka Capital by virtue of the shareho lders agreement, RMB Corvest is the
ultimate controller of Newco.
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Proposed transaction
6. In terms of the proposed transaction Newco inten ds to acquire Sectional
Poles from H&W as a going concern. On completion of the transaction
Newco will have sole control over Sectional Poles.
Rationale for the transaction
7. Corvest’s rationale is that this transaction pre sents an attractive private
equity investment opportunity, from which potential ly attractive returns
might result.
8. H&W submitted that this transaction is part of i ts strategy to inter alia ,
reduce its debt burden in light of the economic downturn.
Effect on competition
9. There is no horizontal overlap between the activ ities of the merging parties
as the acquiring group does not provide any product s or services that are
similar to those provided by the target firm.
Public interest
10. The merging parties submitted that the proposed tr ansaction will not result
in any job losses and as a result will have no impact on public interest.
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Conclusion
11. We approve the proposed transaction unconditionally.
____________________ 05 April 2013
Norman Manoim Date
2 See form CC4 (1) on page 8 of the record.
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Andreas Wessels and Medi Mokuena concurring
Tribunal researcher: Ipeleng Selaledi
For the merging parties: Kayley De Oliveira and Natalie von Ey of Cliffe
Dekker Hofmeyr
For the Commission: Portia Bele