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[2014] ZACT 79
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Main Street (Pty) Ltd and Another v Gijima Group Ltd (019737) [2014] ZACT 79 (10 December 2014)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case No: 019737
In the matter
between:
Main
Street (Pty) Ltd
and
.........................................................................................
Acquiring
Firms
Yebo Guma
investments (Pty) Ltd
and
Gijima
Group
Ltd
.............................................................................................................
Target
Firm
Panel : Norman
Manoim (Presiding Member)
Andreas Wessels
(Tribunal Member)
Mondo Mazwai
(Tribunal Member)
Heard on : 12
November 2014
Order issued on : 12
November 2014
Reasons issued on :
10 December 2014
Reasons for
Decision
Approval
1. On 12 November
2014 the Competition Tribunal (the “Tribunal”)
unconditionally approved an acquisition by Main Street
(Pty) Ltd
(“Main Street”) and Yebo Guma Investments (Pty) Ltd
(“Yebo Guma”) of Gijima Group Ltd (“Gijima”).
2. The reasons for
the approval of the proposed transaction follow.
The Parties and
their activities
3. The primary
acquiring firms are Main Street and Yebo Guma, companies incorporated
under the company laws of the Republic of South
Africa. Main Street
is controlled by the Matana Family Trust 1963 (the “Trust
1963”) and Yebo Guma is controlled by
the Matana Gumede Family
Trust (“Family Trust”). The Trust 1963 and the Family
Trust are ultimately controlled by Robert
Matana Gumede (“Gumede”).
Gumede also controls Robert Matana Gumede Family Business 2007 Trust
(the “Business
Trust”). The group of companies controlled
by Gumede are collectively referred to as the “Guma Group”.
4. Main Street is a
newly incorporated company created specifically for purposes of
acquiring the target firm. It does not control
any firm or provide
any products or services into or from South Africa. Yebo Guma is an
investment holding company which holds
35.4% in Gijima. Yebo Guma
also controls Guma Africa Consulting (Pty) Ltd, Prostart Properties
74 (Pty) Ltd and Guma Investment
Holdings (Pty) Ltd.
5. The Guma Group is
an investment company which holds investments in various sectors
including, mining, tourism, leisure and hospitality,
industrial
sectors, information communication and technology (“ICT”)
and energy.
6. The primary
target firm is Gijima, a public company incorporated under the
company laws of the Republic of South Africa and listed
on the
Johannesburg Stock Exchange. Gijima is not controlled by any single
shareholder. The entities making up the Guma Group currently
hold
46.7% of the issued share capital of Gijima, making it the largest
single existing shareholder.
7. Gijima is an ICT
company which operates throughout South Africa and Namibia. It
provides application services, infrastructure
configuration and
implementation, and end-to-end managed outsource services.
Proposed
transaction and rationale
8. In terms of the
proposed transaction the Guma Group intends to increase its
shareholding in Gijima from 46.7% to more than 50%
through a rights
offer. Post-merger, it is anticipated that the Guma Group will hold
more than 50% of the issued share capital
in Gijima and will have
sole control over the Group.
9. The merging
parties submitted that Gijima wishes to grow into Africa and the Guma
Group support this strategy. The parties further
submitted that by
having only one major shareholder (the Guma Group), unnecessary
administrative work and overheads can be removed.
Competition
Analysis
10.The Commission
found that there is no overlap between the activities of the merging
parties as the Guma Group is not directly
or indirectly involved in
any business activities that are similar or related to those of
Gijima - its only activities in relation
to the ICT market arise from
its shareholding in Gijima. The Commission therefore concluded that
the proposed transaction is unlikely
to substantially lessen or
prevent competition in any relevant market as it does not alter the
market structure.
Public interest
11.The
merging parties confirmed that the proposed transaction will have no
adverse effect on employment and will not result in
any retrenchments
in South Africa.
1
The proposed transaction raises no other public interest concerns.
Conclusion
12. For the, reasons
mentioned above, we approve the proposed transaction unconáitionallv.
10
December 2014
Date
Mr.
Norman Manoim
Mr. Andreas
Wessels and Mrs. Mondo Mazwai concurring
Tribunal Researcher:
Ipeleng Selaledi
For the merging
parties: Sarah Manley of Webber Wentzel
For the Commission :
Daniela Bove
1
See
merger record, pages 9. Also see paragraph 7.1 of the Commission’s
merger report.