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[2015] ZACT 1
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Atlantic Industries v Coca-Cola Shanduka Beverages (Pty) Ltd (020529) [2015] ZACT 1 (11 February 2015)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case No: 020529
In the matter
between:
Atlantic
Industries
...................................................................................
Primary
Acquiring Firm
And
Coca-Cola
Shanduka Beverages (Pty)
Ltd
.................................................
Primary
Target Firm
Panel: Andreas
Wessels (Presiding Member)
Anton Roskam
(Tribunal Member)
Fiona Tregenna
(Tribunal Member)
Heard on: 04
February 2015
Order issued on : 04
February 2015
Reasons issued on :
11 February 2015
Reasons for
Decision
Approval
[1] On 04 February
2015 the Competition Tribunal (“Tribunal”)
unconditionally approved the large merger between Atlantic
Industries
(“Atlantic”) and Coca-Cola Shanduka Beverages (Pty) Ltd
(“CCSB”).
[2]
The reasons for approving the proposed transaction follow.
Parties
to transaction
Acquiring firm
[3] The primary
acquiring firm is Atlantic, a company incorporated in the Cayman
Islands. Atlantic is ultimately controlled by The
Coca-Cola Company
(“TCCC”), through The Coca-Cola Export
Corporation
(“TCCEC”). TCCC is a publicly-listed company incorporated
under the laws of the State of Delaware, United
States of America,
with its registered office in Atlanta, Georgia.
[4] TCCC is a brand
owner and supplier of concentrates for nonalcoholic beverages, which
it sells to bottling and canning companies.
TCCC markets 24 brands in
the non-alcoholic beverages market in South Africa.
Target firm
[5] The primary
target firm is CCSB. CCSB is currently owned by the Shanduka Group,
through Shanduka Beverages Proprietary Limited
(“Shanduka
Beverages”) as to 70% and by TCCC through its subsidiary,
Atlantic as to 30%.
[6] CCSB is an
authorised TCCC bottler, appointed by TCCC to bottle and distribute
branded TCCC products in a defined territory
in South Africa.
Proposed
transaction arid rationale
[7] In terms of the
proposed transaction Shanduka Beverages, Atlantic, CCSB and TCCEC
have entered into a Subscription and Re-purchase
Agreement, in terms
of which Atlantic will subscribe for 1400 additional shares in CCSB.
Shanduka Beverages will then sell the
shares it holds in CCSB back to
CCSB following which the shares repurchased by CCSB from Shanduka
Beverages will be cancelled and
Atlantic will hold all of the issued
shares in CCSB.
[8] TCCC submitted
that the proposed transaction will assist in its intention to
facilitate the combination of certain of its authorised
bottlers into
a single, authorised bottling operation.
[9] The Shanduka
Group submitted that the proposed transaction will assist with its
current process of ownership restructuring and
reorganisation of its
asset portfolio, including in relation to its 70% holding in CCSB.
Competition
assessment
[10] The Competition
Commission (“Commission") found that the proposed
transaction results in no horizontal overlap of
activities, since
TCCC is a brand owner and supplier of concentrates for non-alcoholic
beverages, whilst CCSB is an authorised
bottler and distributor of
TCCC branded products in South Africa.
[11] The Commission
further found that CCSB bottles and distributes non-alcoholic
beverages exclusively for TCCC. Furthermore, TCCC
does not use any
other external bottling companies except its own authorised bottlers.
The proposed transaction therefore is unlikely
to raise vertical
competition concerns.
[12] We concur with
the Commission’s findings and conclusions on the merits.
Public interest
[13]
The merging parties confirmed that the proposed transaction will not
have any negative effect on employment.
1
[14] The proposed
transaction further raises no other public interest concerns.
CONCLUSION
[15] The proposed
transaction is unlikely to substantially prevent or lessen
competition in any relevant market and does not raise
any public
interest concerns. We therefore approve the proposed transaction
without conditions.
Mr
Andreas Wessels
Mr
Anton Roskam and Prof. Fiona Tregenna concurring
11
February 2015
DATE
Tribunal Researcher:
Caroline Sserufusa
For the merging
parties: Chris Charter of Cliffe Dekker Hofmeyr
For the Commission:
Gilberto Biacuana
1
Merger
record
inter
alia
page
6.