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COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No.: 017723
In the matter between:
Old Mutual Investment Group
(South Africa) (Pty) Ltd Primary Acquiring Firm
and
Main Street 642 (Pty) Ltd Primary Target Firm
Panel : Mondo Mazwai (Presiding Member)
Medi Mokuena (Tribunal Member)
Fiona Tregenna (Tribunal Member)
Heard on : 02 October 2013
Order issued on : 02 October 2013
Reasons issued : 30 October 2013
DECISION
Unconditional approval
[1] On 02 October 2013, the Competition Tribunal (“Tribunal”) unconditionally
approved a proposed acquisition by Old Mutual Investment Group (South Africa)
(Pty) Ltd of Main Street 642 (Pty) Ltd.
[2] The reasons for approving the proposed transaction follow.
Parties to transaction
The primary acquiring firm
[3] The primary acquiring firm is Old Mutual Investment Group (South Africa) (Pty)
Ltd (“OMIGSA”). OMIGSA is a wholly-owned subsidiary of Old Mutual (South
Africa) (Pty) Ltd and its ultimate holding company is Old Mutual plc.1) Old
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Mutual plc is listed on the London, Johannesburg, Malawi, Namibia and
Zimbabwe stock exchanges. Old Mutual Plc is a global long-term savings,
banking and investment group.
[4] OMIGSA is a registered investment portfolio management company which
provides services to retail and institutional investors. It falls into Old Mutual Plc’s
emerging markets division.
The primary target firm
[5] The primary target firm is Main Street 642 (Pty) Ltd (“Main Street”). Old Mutual
Life Assurance Company (“OMLACSA”), which is a sister company to OMIGSA
in the Old Mutual plc group, currently holds a 40.6% interest in Main Street.
Mezzanine Partners 2, LP holds a 40.6% interest. Ethos Capital V GP (SA) (Pty)
Ltd, Ethos Capital V GP (Jersey) Limited and the Ethos Fund V Co-Investment
Trust (collectively referred to as “Ethos”) hold a 18.8% interest.
[6] The sole purpose of Main Street is to hold preference shares in the issued
share capital of Tiswala Holdings (Pty) Ltd (“Tiswala”) which is owned by
Kagiso Tiso Holdings, which is an investment-holding company with portfolios in
the financial services, power, infrastructure, media and property sectors.
[7] Tiswala is a ring-fenced investment vehicle whose only activity is its investment
in Tiswala Investments (Pty) Ltd (“Tiswala Investments”). Tiswala Investments
holds part of the issued share capital in Idwala Industrial Solutions (“Idwala”).
Idwala is involved in the production of industrial minerals such as calcium
carbonate and magnetite.
Proposed transaction and rationale
Proposed transaction
[8] In terms of the proposed transaction, OMIGSA will acquire a [confidential]
interest in Main Street from OMLACSA and a [confidential] interest from
Mezzanine Partners. In essence, OMIGSA will replace OMLACSA by acquiring
1) See page 785 of the record.
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OMLACSA's interest in Main Street as well acquiring additional shares in Main
Street, resulting in OMIGSA controlling [confidential] of the shareholding in
Main Street, post the transaction. The remaining shares will be held by Ethos
and Mezzanine Partners.
[9] Post-implementation of the proposed transaction, OMIGSA will control Main
Street.
Rationale
[10] The acquiring firm’s rationale for the proposed transaction is that
[confidential].
[11] The target firm’s rationale for the proposed transaction is that [confidential].
Competition assessment
Horizontal assessment
[12] There is no product or services overlap between the activities of the merging
parties. Old Mutual plc does not control any firm involved in the production of
industrial metals and the target firm is merely a ring-fenced investment vehicle
through which preference shares are held in Tiswala Investments.
[13] Furthermore, the transaction does not alter the structure of the market for the
production of industrial minerals.
Vertical assessment
[14] The proposed transaction will not result in any vertical effects.
Public interest
[15] The merging parties confirmed that the proposed transaction will not have
any adverse impact on employment and that no retrenchments will result from
the proposed transaction.2) No other public interest issues arise as a result of
this transaction.
2) See page 3 of the merger record.
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CONCLUSION
[16] Having regard to the facts above, we find that the proposed transaction is
unlikely to substantially prevent or lessen competition in any relevant market.
Furthermore, no public interest concerns arise as a result of the proposed
transaction. Accordingly, we approve the proposed merger unconditionally.
_______________ 30 October 2013
Mondo Mazwai DATE
Medi Mokuena and Fiona Tregenna concurring
Tribunal Researcher: Nicola Ilgner
For the Commission: Xolela Nokele
For the merging parties: Daryl Dingley of Webber Wentzel