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[2013] ZACT 116
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Industrial Electronics Investments Ltd and Others v Dartcom (Pty) Ltd and Another (017798) [2013] ZACT 116 (19 December 2013)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No.: 017798
In
the matter between
Industrial
Electronics Investments
Limited
Primary
Acquiring Firms
New
Gx TMT and Energy (Pty) Ltd
Community
Investment Ventures Holdings (Proprietary) Limited
and
Dartcom
(Proprietary)
Limited
Primary
Target Firms
Community
Investment Ventures Holdings (Proprietary) Limited
Panel: : Takalani
Madima (Presiding Member)
Mondo Mazwai (Tribunal
Member)
Medi Mokuena (Tribunal
Member)
Heard
on :
20 November 2013
Order
issued on :
20 November 2013
Reasons
issued on: 19
December 2013
Reasons
for Decision
APPROVAL
[1]
On 20 November 2013 the Competition
Tribunal (“Tribunal”) unconditionally approved the merger
between Industrial Electronics
Investments Limited (“I El”),
New Gx TMT and Energy (Pty) Ltd (“New GX”), Community
Investment Ventures
Holdings (Proprietary) Limited(“CMT) and
Dartcom (Proprietary) Limited (“Dartcom”) and Community
Investment Ventures
Holdings (Proprietary) Limited (“CIVH”).
[2]
The reasons for approving the proposed
transaction follow.
Parties
to transaction
[3]
The primary acquiring firms are IEI, New
Gx and CIVH.
•
IEI
is wholly-owned by VenFin Technology (Pty) Ltd (“VenFin
Technology “), which in turn is wholly-owned by VenFin Limited
(“VenFin”), which in turn is wholly-owned by Remgro
Limited (“Remgro”). Remgro is s publicly held company
with its securities listed on the Johannesburg Stock Exchange
(“JSE”). Remgro is an investment holding company whose
investment portfolio currently includes more than 30 investee
companies in a number of industries, such as banking and financial
services, medical services, food, wine and spirits, petroleum
products, glass products amongst others.
[1]
•
New
Gx is controlled by New Gx Capital Holdings (Pty) Ltd (“New Gx
Capital”), which is controlled by the Khuno Share
Trust
•
CIVH
is an investment company which does not trade. It predominantly
focuses on opportunities in the telecommunications, information
technology and power and energy sectors.
[4]
The primary target firms are CIVH and a
yet to be established shelf company (“New Dartcom”) which
will acquire the business
of Dartcom. New Dartcom will thus be owned
by CIVH, New Gx and management.
•
Dartcom
is a specialist distributor of telecommunication equipment which is
supplied to network operators, OEM suppliers and network
integrators.
The Dartcom range includes RF and microwave cables, connectors and
assemblies, antennas, lighting protection for both
internal and
external application amongst others
[2]
PROPOSED
TRANSACTION
[5]
The proposed transaction involves a
group restructuring and is comprised of various steps that will give
rise to the following changes:
•
I
El will acquire direct control of CVIH through the acquisition of
issued share capital of CVIH,
•
Dartcom
will sell its entire business as a going concern to a newly-formed
company New Dartcom and
•
The
remaining shares in the New Dartcom will be jointly held by New Gx,
CVIH and management.
[6]
In conclusion, the only acquiring group
that will acquire control over business not previously controlled
wili be Remgro.
Competition
assessment
[7]
The
proposed transaction results in no overlaps, as the proposed
transaction is essentially a group restructuring. Since Remgro
is the
only firm that will be acquiring control over a business not
previously owned, there is no firm in the Remgro group of companies
that provides products and services which are substitutable with a
product or service offered by the CVIH Group. Furthermore, Remgro
already controls Muvoni Weltex, DFA, Market Demand Trading, MCT
Telecomms, SAHPE and Dartcom.
[3]
PUBLIC
INTEREST
[8]
The
merging parties confirmed that the proposed transaction will have no
adverse effect on employment
[4]
and the proposed transaction raises no other public interest
concerns.
CONCLUSION
[9]
We therefore approve the merger
unconditionally.
19
December 2013
DATE
Dr
Takalani Madima
Ms.
Mondo Mazwai and Ms. Medi Mokuena concurring
Tribunal
Researcher:
Caroline Sserufusa
For
the merging parties:
Janine Simpson of Webber Wentzel
For
the Commission:
Gilberto Biacuana
[1]
See page 89 of Merger record.
[2]
See page 106 of Merger record for a detailed description of the
activities of Dartcom.
[3]
See page 13 of Commission's report.
[4]
See page 111 of the Merger record.