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[2014] ZACT 49
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Barloworld SA (SA) Ltd v Jacmes Motors CC t/a Van Der Linde Toyota and Another (018986) [2014] ZACT 49 (7 August 2014)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: 018986
In
the matter between:
BARLOWORLD
SA
(PTY)
LTD
Primary Acquiring Firm
And
JACMES
MOTORS CC T/A
VAN
DER
LINDE
TOYOTA AND CEV
MOTORS (PTY)
LTD
Primary Target Firm
Panel
T Madima (Presiding Member)
F
Tregenna (Tribunal Member)
A
Roskam (Tribunal Member)
Heard
on
30 July 2014
Order
Issued on 30 July 2014
Reasons
Issued on 7 August 2014
Reasons
for Decision
Approval
[1]
On 30 July 2014, The Competition
Tribunal (“Tribunal”) unconditionally approved the
acquisition by Barloworld South
Africa (Pty) Ltd (“Barloworld
SA”) to acquire the entire issued share capital of Jacmes
Motors CC trading as Van Der
Linde Toyota and CEV Motors ("Jacmes
Motors”).
[2]
The reasons for approving the proposed
transaction follow hereunder.
Parties
to the transaction
[3]
The primary acquiring firm is Barloworld
SA, a wholly-owned subsidiary of Barloworld Limited Group
(“Barloworld Group”).
The Barloworld Group is listed on
the Johannesburg Securities Exchange and it is not controlled by any
single shareholder. Barloworld
SA controls a number of firms.
[4]
The primary target firm is Jacmes
Motors, a company jointly controlled by Mr James Alwyn Van der Linde
and Mr Jacob Gerhardes Van
der Linde.
Proposed
Transaction and Rationale
[5]
Barloworld intends to acquire the entire
issued share capital in Jacmes Motors, this includes goodwill and
assets.
[6]
The proposed transaction will enable
Barloworld SA automotive to grow in the Northern Cape Province
(“Province”) within
the Toyota, VW, Caltex and Engen
brands. The Province is experiencing economic growth largely
attributed to mining and agricultural
activities. The Barloworld SA
retail business offering will also grow by enhancing links between
manufacturers and customers and
a better range of products which
customers can choose from.
[7]
For Jacmes Motors the proposed
transaction will enable the shareholders to realise their investments
in the business. The transaction
will also ensure that the business
operations are kept intact and that the employment levels are not
affected.
Relevant
Market and Impact on Competition
[8]
The merging parties are both active in
the market for retail or distribution of new and used motor vehicles.
The Barloworld Group
is a distributor of leading international brands
and provides integrated rental, fleet management, product support and
logistics
solutions. The Barloworld Group controls various joint
ventures, consolidated and unconsolidated subsidiaries such as Avis
Southern
Africa Limited, Barloworld Equipment (Pty) Ltd, 1-Lyster,
Volkswagen, BMW, Chrysler, Audi, Ford and Toyota dealerships in the
Free
State, KZN, Mpumalanga, Gauteng and Western Cape region. The
Barloworld Group provides a link between the manufacturer and
customer
and it also adds value through sales, after-market support
and solutions to customers.
[9]
Jacmes Motors is active in the retail of
new and used motor vehicles and on the sale of fuel. Jacmes Motors
comprises of the Toyota
and VW dealerships as well as Engen and
Caitex service station. They are all located in the region of
Postmasburg in the Province.
It also provides automotive parts and
accessories and repair and/or ancillary services.
[10]
There is a product overlap in the market
for the retail or distribution of new and used motor vehicles as both
the merging parties
operate vehicle dealerships. The Commission
further identified a geographic overlap even though the distance
between Kuruman, where
Barloworld’s dealership is based and
Postmasburg, where Jacmes Motors is based within 127km distance
separating them. The
Commission is of the view that the Province is a
wide spread region. Competitors such as Toyota and Delta were
contacted, they
confirm that the two dealerships do indeed compete
with one another even with the distance and customers are willing to
travel
up to 200km within the Province.
[11]
The Commission is of the view that there
is sufficient competition in this market since all the dealerships
can buy pre-owned vehicles
and resell them to the end customer. The
merging parties will still face competition from over 60 dealerships
within a 200km radius.
Conclusion
[12]
In light of the above I conclude that
the proposed transaction is unlikely to substantially prevent or
lessen competition in the
markets for the retail of new and used
passenger vehicles. In addition, no public interest issues arise from
the proposed transaction.
Accordingly | approve the proposed
transaction unconditionally.
7
August 2014
DATE
______________
Dr
T Madima
Prof.
F
Tregenna
and
Mr A Roskam
concurring.
Tribunal
Researcher:
Moleboheng Moleko
For
the merging parties:
Iona Dhladhla -Bowman Gilfillan Incorporated
For
the Commission:
Hardin Ratshrsusu, Seema
Nunkoo and Thelani Luthuli