About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Competition Tribunal
SAFLII
>>
Databases
>>
South Africa: Competition Tribunal
>>
2014
>>
[2014] ZACT 37
|
|
Barloworld South Africa (Pty) Ltd v Leatoy (Pty) Ltd (018317) [2014] ZACT 37 (14 March 2014)
COMPETITION TRIBUNAL
OF SOUTH AFRICA
Case No: 018317
In the matter between:
Barloworld South
Africa (Pty)
Ltd
Primary Acquiring Firm
And
Leatoy (Pty)
Ltd
Primary Target Firm
Panel:
Takalani Madima (Presiding Member)
Medi Mokuena (Tribunal
Member)
Anton Roskam (Tribunal
Member)
Heard
on:
19 February 2014
Order
Issued:
19 February 2014
Reasons Issued
on:
14 March 2014
Reasons for Decision
Introduction
[1]
On 19 February 2014 the Competition Tribunal approved the
acquisition by Barloworld South Africa (Pty) Ltd of Leatoy (Pty) Ltd
trading
as Leach Toyota. The Reasons for approving the transaction
are set out below.
The parties
[2]
The primary acquiring firm is Barloworld South Africa (Pty)
Ltd (“Barloworld SA”). Barloworld SA is a wholly owned
subsidiary
of Barloworld Limited Group which is listed on the
Johannesburg Stock Exchange and secondary listings on the London and
Namibia
stock exchanges. The proposed transaction is taking place
within the Barloworld Automotive division of Barloworld Limited.
[3]
The primary target firm is Leatoy (Pty) Ltd, trading as Leach
Toyota (“Leach Toyota”). Leach Toyota is controlled by
4
shareholders namely Harry Leach Trust (with 65% shareholding), JA
Leach Trust (with 15% shareholding), DC Leach Trust (with 15%
shareholding) and H Leach Trust (with 5% shareholding).
The transaction
[4]
Barloworld SA will acquire sole control of Leach Toyota and
its business, which business sells and services Toyota and Hino motor
vehicles in Kuruman.
The rationale for the
transaction
[5]
Barloworld contends that the proposed transaction will present
it with an opportunity to enter a new geopraphic are where its
Automotive
division is not currently represented.
[6]
Leach Toyota avers that the transaction will present its
shareholders with an opportunity to recoup their investment.
Effect on Competition
[7]
The Barloworld Group is a distributor of leading international
vehicle brands such as Mercedies Benz, Chrysler, MBW, General Motors,
Ford, Toyota, Volkswagen and Audi and it also provides integrated
rental, fleet management, product support and logistics solutions.
[8]
Leach Toyota is a Toyota and Hino franchised dealer in new and
used commercial and passenger motor vehicles and it also provides
automotive parts and accessories and offers repair and/or ancillary
services. It owns one dealership which is based in the Kuruman
area
in the Northern Cape province.
[9]
The transaction will result in a horizontal overlap in the
following relevant product markets as identified by the Commission:
•
The sale of new
and used passenger vehicles
•
The sale of new
commercial vehicles, which include light medium and heavy commercial
vehicles
[10]
Barloworld owns dealerships in the Free State, KZN,
Mpumalanga, Gauteng and the Western Cape. The Commission found that
there is
no overlap in the geographic market for new passenger
vehicles as Barloworld is not active in the Northern Cape province or
any
region close to Kuruman where Leach Toyota is active.
[11]
With
regard to the sale of new commercial vehicles the Commission, based
on previous decisions of the Tribunal, considered the geographic
market as national.
[1]
Within the national market the merged entity's market share in the
market for light, medium and heavy commercial vehicles would
be less
than 5%.
[12]
The transaction is therefore unlikely to substantially prevent
or lessen competition in any of the relevant markets identified
above.
Public Interest
[13]
The merging parties submitted that there would be no job
losses as a result of the transaction.
Conclusion
[14]
In light of the above f find that the transaction is unlikely
to result in a substantial lessening or prevention of competition in
the markets for new and used passenger vehicles in Kuruman and for
new commercial vehicles nationally. In addition the proposed
transaction raises no public interest issues.
[15]
I
accordingly approve the proposed transaction.
14 March 2014
Date
Takalani
Madima
Medi Mokuena and Anton
Roskam concurring
Tribunal Researcher: For
the merging parties: For the Commission:
Rietsie Badenhorst Bowman
Gilfillan
Clementine Mahlangu and
Grashum Mutizwa
[1]
See Tribunal decision 33/LM/May02 - 38/LM/May02 on page 8.