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[2014] ZACT 89
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Barloworld SA (Pty) Ltd v Anycar (Pty) Ltd t/a Jaguar Land Rover (018531) [2014] ZACT 89 (13 May 2014)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case No: 018531
In
the matter between:
BARLOWORLD
SA(PTY)
LTD
.............................................................................
Primary
Acquiring Firm
And
ANYCAR
(PTY) LTD T/A JAGUAR LAND
ROVER
...............................................
Primary
Target Firm
Panel: N. Manoim
(Presiding Member)
: Y Carrim (Tribunal
Member)
: M Mokuena
(Tribunal Member)
Heard on: 9 April
2014
Order Issued on: 9
April 2014
Reasons Issued on:
13 May 2014
Reasons for
Decision
Approval
[1]
On 9 April 2014, The Competition Tribunal
(“Tribunal”)
unconditionally
approved the acquisition by Barloworld SA (Pty) Ltd of a 51% of the
issued shares in Newco (Pty) Ltd.
[2] The reasons for
approving the proposed transaction follow hereunder.
Parties to the
transaction
[3]
The primary acquiring firm is Barloworld South Africa (Pty) Ltd
(“Barloworld
SA”),
a
wholly owned subsidiary of Barloworld Limited Group
(“Barloworld
Limited”).
Barloworld
Limited is listed on the Johannesburg Securities Exchange and is not
controlled by any single shareholder. Barloworld
SA controls a number
of firms and is engaged in joint ventures.
1
[4]
The primary target firm is Anycar (Pty) Ltd t/a Jaguar Land Rover N4
Witbank
(“Anycar”).
Anycar
is controlled by Newco (Pty) Ltd
(“Newco”),
which
is in turn wholly controlled by Mr Craig Douglas White
(“Mr
White”)
its
sole shareholder. Anycar does not directly or indirectly control any
firm in South Africa.
Proposed
Transaction and Rationale
[5] Barloworld SA
intends to acquire 51% of the issued shares in Newco. The remaining
49% will be held by Mr White. Post-merger,
Anycar will be jointly
controlled by Barloworld SA and Mr White.
[6] The proposed
transaction will enable the acquiring company to extend its
geographic coverage in Mpumalanga, its dealer network
and its service
and product offering to customers.
[7] Anycar’s
shareholder wants to recover his investment in the business and
Barloworld has been identified as the best fit
for that business.
Relevant Market
and Impact on Competition
[8]
The merging parties are both active in the market of retail sale of
new and used passenger vehicles. Barloworld Limited is a
distributor
of leading international brands providing integrated rental, fleet,
management, product support and logistics solutions
in 26 countries
worldwide. In South Africa, the core divisions of Barloworld Limited
comprise of (i) Barloworid Equipment, (ii)
Barloworld Automotive,
(iii) Barloworld Handling and (iv) Barloworld Logistics. What is
relevant for this transaction is Barloworld
Automotive, which
inter
alia
,
owns two dealerships in Middleburg and Witbank in Mpumalanga
province. Anycar is a Land Rover and Jaguar franchised dealer and
its
business includes the sale and servicing of Jaguar and Land Rover
motor vehicles in the Witbank area.
[9] The Commission
identified overlaps in the activities of the merging parties in
respect of the markets for the retail sale of
new and used passenger
vehicles. In respect of the relevant geographic market the Commission
used a 20 - 50 km radius (which includes
the Witbank and Middleburg
areas) from Anycar dealership for both markets.
[10] In the market
for the retail sale of new passenger vehicles the merging parties
will have a post market share of between 17.96%
to 22.04%. The
Commission found that there are approximately 30 new passenger
vehicle dealerships that directly compete with the
merging parties,
including Volkswagen Group SA Witbank, Volkswagen Group SA
Middleburg, AMH Witbank AMH Middleburg and others.
The Commission
therefore concluded that the proposed merger is unlikely to raise
competition concerns as there remain numerous
players in the Witbank
and Middleburg areas that will continue to constrain the merged
entity post-merger in this market.
[12] The Commission
also interviewed various competitors of the merging parties who
indicated that this market is constrained by
new vehicle market. None
of the competitors interviewed raised any concerns about the proposed
transaction. The Commission therefore
concluded that this transaction
is unlikely to substantially lessen or prevent competition as the
market for used vehicles is competitive
with almost all the
dealerships in Witbank and Middleburg selling used passenger
vehicles. At the hearing the merging parties confirmed
that
Barloworld SA does not presently distribute Land Rover or Jaguar
products. The vehicles it distributes in the Witbank/Middelburg
area
are Barloworld Toyota and Hino and Barloworld Toyota and are thus not
directly competitive with those of the target firm.
The merging
parties further confirmed that the nearest competing brand to the
Witbank/Middelburg area was the BMW dealership in
Pretoria.
Conclusion
[13] In light of the
above we conclude that the proposed transaction is unlikely to
substantially prevent or lessen competition
in the markets for the
retail sale of new and used passenger vehicles. In addition, no
public interest issues arise from the proposed
transaction.
Accordingly we approve the proposed transaction unconditionally.
13 May 2014
DATE
Norman
Manoim
Yasmin Carrim and
Medi Mokuena
Tribunal Researcher:
Moleboheng Moleko
For the merging
parties: Bowman Gilfillan Incorporated
For the Commission:
Hardin Ratshisusu
1
See
pages 130 and 131 of the record for a list of these firms.