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[2015] ZACT 48
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Investec Bank Limited v Blue Strata Trading (Pty) Ltd and Others (LM008Apr15) [2015] ZACT 48; Wessels J (3 June 2015)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: LM008Apr15
DATE:
03 JUNE 2015
In the matter
between:
INVESTEC
BANK
LIMITED
........................................................................
Primary
Acquiring Firm
And
BLUE STRATA
TRADING (PTY) LTD AND
6
BAR SYSTEMS (PTY)
LTD
............................................................................
Primary
Target Firms
Panel: Mr A
Wessels (Presiding Member)
:
Prof F Tregenna (Tribunal Member)
:
Ms M Mokuena (Tribunal Member)
Heard on : 27
May 2015
Order Issued
on : 27 May 2015
Reasons Issued
on : 03 June 2015
Reasons
for Decision
Approval
[1]
On 27 May 2015, the Competition Tribunal (“Tribunal”)
unconditionally approved the acquisition by Investec Bank
Limited
(“Investec Bank”) of Blue Strata Trading (Pty) Ltd (“Blue
Strata Trading”) and 6 Bar Systems (Pty)
Ltd (“6 Bar
Systems”). Blue Strata Trading and 6 Bar Systems are
collectively referred to hereinafter as Blue Strata.
[2]
The reasons for approving the proposed transaction follow.
Parties
to proposed transaction
[3]
The
primary acquiring firm is Investec Bank. Investec Bank is the main
subsidiary bank of Investec Limited (“Investec”).
Investec is listed on the Johannesburg Securities Exchange Limited
and no single firm controls Investec for competition law purposes.
Investec directly and indirectly controls a number of firms.
[2]
[4]
Investec is part of an international specialist banking group that
provides a diverse range of financial products and services
to a
niche client base in the United Kingdom and South Africa. Relevant
for this transaction are its local trade finance, debtor
finance and
asset based lending activities which are done through its subsidiary
Reichmans (Pty) Ltd (“Reichmans”).
[5]
The
primary target firms are (i) Blue Strata Trading; and (ii) 6 Bar
Systems. As stated above, these two entities are referred to
collectively in these reasons as Blue Strata. Blue Strata directly
and indirectly controls certain firms.
[3]
[6]
Blue Strata is an import facilitation specialist which integrates the
various services in the import process by managing not
only the
physical movement of products, but also the order management, foreign
exchange, finance and product costing. Blue Strata
facilitates all
aspects of importation - from order placement, confirmation, tracking
and the management of import logistics until
delivery of the product
to its clients.
Proposed
transaction and rationale
[7]
Investec wishes to increase its shareholding in Blue Strata from the
current 48.5% to 100%. Post-merger Investec will have sole
control
over Blue Strata.
[8]
Investec
inter alia
views the
acquisition of Blue Strata as a growth opportunity.
[9]
Blue Strata submitted that the proposed transaction will enable it to
access funding to grow the business.
Impact
on competition
[10]The
Commission found that there is no horizontal overlap between the
activities of the merging parties since Investec is involved
in the
provision of international and local trade finance whilst Blue Strata
provides a full import service to its clients, as
explained above,
and does not offer trade finance as a separate service similar to
Investec. This was confirmed by the customers
of Blue Strata.
[11]The
Commission also found that there is an existing vertical relationship
between the merging parties since Investec Bank provides
funding to
Blue Strata. The Commission however concluded that this relationship
is unlikely to result in any post-merger foreclosure
concerns since
it existed pre-merger and, furthermore, there are a number of other
banks such as ABSA, Standard Bank and FNB that
provide similar
funding.
[12]We
concur with the Commission’s conclusion that the proposed
merger is unlikely to substantially prevent or lessen competition
in
any relevant market.
Public
interest
[13]The
merging parties confirmed that the proposed transaction will not
result in any negative employment consequences.
[4]
[14]The
proposed merger further raises no other public interest concerns.
Conclusion
[15]In
light of the above, we conclude that the proposed transaction is
unlikely to substantially prevent or lessen competition
in any
relevant market. In addition, no public interest issues arise from
the proposed transaction. Accordingly we approve the
proposed
transaction unconditionally.
03
June 2015
DATE
Mr A W&ssels
Prof
F Tregenna and Ms M Mokuena concurring
Tribunal
Researcher: Moleboheng Moleko
For
the merging parties: Paul Coetser and Ahmore Burger-Smidt of
Werksmans
For
the Commission: Billy Mabatamela
2
See merger record, page 43.
[2]
See merger record for details.
[3]
The reasons for approving the proposed transaction follow.
[4]
Merger record, pages 9 and 72.