COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 108/LM/Dec 12
(016063)
In the merger between:
SUPER GROUP HOLDINGS (PTY) LTD PRIMARY ACQUIRIN G FIRM
And
SAFIKA LOGISTICS HOLDINGS (PTY) LTD P RIMARY TARGET FIRM
Panel : Andreas Wessels (Presiding Member)
Imran Valodia (Tribunal Member)
Lawrence Reyburn (Tribunal Member)
Heard on : 27 February 2013
Order issued on : 27 February 2013
Reasons issued on : 16 April 2013
Decision
Approval
[1] On 27 February 2013, the Competition Tribunal ( “Tribunal”) approved the
proposed transaction involving Super Group Holdings (Pty) Ltd and Safika
Logistics Holdings (Pty) Ltd.
[2] The reasons for approving the proposed transaction follow.
Parties to transaction
[3] The primary acquiring firm is Super Group Holdi ngs (Pty) Ltd (“Super Group”),
a private company incorporated in accordance with the laws of the Republic of
South Africa. Super Group is controlled by Super Gr oup Limited, a JSE
Limited listed company.
[4] Super Group is a warehousing and logistics comp any that offers planning and
management of all activities across the relevant su pply chain including the
sourcing, procurement, transport and warehousing of goods and services. It
offers inter alia logistics services in respect of fast moving consu mer goods,
consisting of beer and spirits, bagged maize, tyres and parcels in respect of
courier services on tautliner/flatdeck-type vehicle s; and bulk cement and bulk
lime in dry bulk tanker-type vehicles.
[5] The primary target firm is Safika Logistics Hol dings (Pty) Ltd (“Safika
Logistics”), a private company incorporated in accordance with the laws of the
Republic of South Africa. The current shareholders of Safika Logistics are
Safika Holdings (Pty) Ltd (with a 75% shareholding) and the Quattro Trust
(with a 25% shareholding).
[6] Safika Logistics is an investment holding firm which controls Safika
Oosthuizens Transport (Pty) Ltd (“Safika Oosthuizen s”). Safika Logistics,
through Safika Oosthuizens, is a logistics services company that provides the
hauling of dry bulk goods such as coal, chrome, “ru n of the mine minerals” 1,
as well as sand, stones and animal feed in tipper-truck vehicles.
Proposed transaction and rationale
[7] The proposed transaction envisages the acquisition by Super Group of 75% of
the shares in Safika Logistics, with the remaining 25% of the shares being
held by Safika Holdings (Pty) Ltd. 2
1 By-product(s) of coal mining.
2 See Memo submitted by Fluxmans Attorneys dated 26 February 2013. Also see transcript, pages 3
and 4.
[8] According to Super Group it currently has no pr esence in the tipper-type
based logistics sector and desires to expand into this sector.
[9] The selling shareholders of Safika Holdings wis h to realise (all or a part of)
their investment in Safika Holdings.
Competition assessment
[10] The Commission concluded that if a broad appro ach is taken to product
market delineation, then there is an overlap betwee n the activities of the
merging parties. However, the proposed transaction is unlikely to substantially
prevent or lessen competition in such a broad marke t given the relatively
small market positions of the merging parties and the number of players in the
transport and logistics industry.
[11] If a narrow approach is taken to market deline ation, then there is limited
product overlap between the activities of the mergi ng parties in potential sub-
markets. The merging parties namely contended that Super Group uses
tankers for the transportation of goods for customers whereas Safika Logistics
uses tippers. 3 After questioning by the Tribunal, Super Group exp lained its
(historic) ownership of a number of tippers, the co ndition of those tippers and
the intended on-selling of certain repossessed tipp ers. 4 However, even if the
tippers currently still owned by Super Group are co nsidered as part of the
competition analysis, the accretion in market share in the potential relevant
sub-market as a result of that is very limited and does not raise likely
competition concerns.
[12] Furthermore, customers contacted by the Commis sion as part of its market
investigation raised no concerns with regards to the proposed transaction.
3 See transcript, pages 5 and 6.
4 Transcript pages 6 to 8.
Public interest
[13] The merging parties confirmed that the propose d transaction will not have
any effect on employment. 5
[14] No other public interest issues arise as a result of this transaction.
CONCLUSION
[15] We approve the proposed merger unconditionally.
______________________ 16 April 2013
ANDREAS WESSELS DATE
Imran Valodia and Lawrence Reyburn concurring
Tribunal Researcher: Nicola Ilgner
For the Commission: Zanele Hadebe and Selelo Ramoh lola
For the merging parties: Fluxmans Attorneys
5 See pages 5 and 60 of the merger record.