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[2015] ZACT 90
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Friedshelf 1577 Proprietary Limited v River Lily Investments Proprietary Limited and Another (LM007Apr15 (021220)) [2015] ZACT 90 (7 July 2015)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No:
LM007Apr15
(021220)
In
the matter between:
Friedshelf
1577
Proprietary
Limited
Primary Acquiring Firm
and
River
Lily Investments Proprietary Limited
Newshelf
702
Proprietary
Limited
Primary Target Firms
Panel
: Norman Manoim (Presiding Member)
: Andiswa Ndoni (Tribunal
Member)
: lmraan I Valodia
(Tribunal Member)
Heard
on
: 17 June 2015
Order
Issued on
: 17 June 2015
Reasons
Issued on
: 7 July 2015
Reasons
for Decision
Approval
[1]
On 17 May 2015, the Competition Tribunal ("Tribunal")
unconditionally approved the merger between Friedshelf 1577
Proprietary Limited ("Friedshelf") and River Lily
Investments Proprietary Limited ("River Lily") and Newshelf
1167 ("Newshelf').
[2]
The reasons for approving the proposed transaction follow.
Primary
acquiring firm
[3]
The primary acquiring firm Friedshelf is a private company
incorporated in accordance with the laws of South Africa. Friedshelf
is controlled by CapClient Holdings SARL which is in turn controlled
by L Perlman SECS.
[4]
L Perlman SECS is an investment holding company. It controls
subsidiaries which hold interests in South African insurance
companies
for the provision of long and short term insurance as well
as unsecured personal loans.
Primary
target firm
[5]
The primary target firms are River Lily and Newshelf. Both the target
firms are jointly controlled by Capclient and Hollard
Holdings.
[6]
Both target firms are private companies registered in South Africa
that do not conduct any activities.
Proposed
transaction and rationale
[7]
In terms of the proposed transaction Friedshelf a subsidiary of the
L. Perlman SECS group will acquire from a fellow subsidiary
the
voting rights in River Lily and Newshelf from Hollard Holdings. On
completion of the proposed transaction Friedshelf will acquire
direct
control of the target firms. The proposed transaction will also
result in Friedshelf acquiring indirect control over Clientele
Ltd
due to the fact that both the target firms hold shares in Clientele
Ltd.
[8]
The proposed transaction is designed to bring the structure of the
Group's operating companies in line with the requirements
of the
Insurance Bill of 2015, the aim of which is to prevent operating
companies from owning shares in one another.
Impact
on competition
[9]
According to the Competition Commission's ("the Commission")
findings the proposed transaction does not result
in any
overlap between the activities of the primary acquiring group and the
target firms. Further, the proposed transaction does
not alter the
insurance market in South Africa as it is a reorganization of control
within the same economic entity.
[10]
We concur with the Commission's competition assessment, i.e. that the
proposed transaction is unlikely to substantially prevent
or lessen
competition in any relevant market.
Public
interest
[11]
The
merging
parties
confirmed
that
the
proposed
transaction
will
not
result
in
an adverse
impact on
employment.
[1]
The
proposed
transaction
further
raises
no other
public
interest
concerns.
Conclusion
[12]
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.
07
July
2015
DATE
_________________________
Norman
Manoim
Andiswa
Ndoni and lmraan I Valodia
concurring
Tribunal
Researcher:
Aneesa Ravat
For
the merging parties: Kirsty
van den Bergh and Justin Balkin of ENS Africa
For
the Commission:
Daniela Bove and Grashum Mutizwa
[1]
Inter
alia
merger
record page 12.