About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Competition Tribunal
SAFLII
>>
Databases
>>
South Africa: Competition Tribunal
>>
2015
>>
[2015] ZACT 91
|
|
Drago International Ventures Limited v Active Topco Limited (LM019May15) [2015] ZACT 91 (13 July 2015)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No:LM019May15
In
the matter between:
DRAGO
INTERNATIONAL
VENTURES
LIMITED
Acquiring Firm
And
ACTIVE
TOPCO
LIMITED
Target Firm
Panel
: Norman Manoim (Presiding Member)
: Yasmin Carrim (Tribunal
Member)
: Medi Mokuena (Tribunal
Member)
Heard
on
: 1 July 2015
Order
Issued on
: 1
July 2015
Reasons
Issued on
: 13 July 2015
Reasons
for Decision
Approval
[1]
On 1 July 2015, the Competition Tribunal ("Tribunal")
unconditionally approved the merger between Drago International
Ventures Limited ("Drago") and Active Topco Limited
("Active Topco").
[2]
The reasons for approving the proposed transaction follow.
Parties
to transaction and their Activities
Primary
acquiring firm
[3]
The primary acquiring firm is Drago, a company incorporated in
accordance with the laws of the British Virgin Islands. Drago
is
ultimately controlled by Brait Societas Europaea ("Brait SE"),
a public company listed on the Euro MTF Market of the
Luxembourg
Stock Exchange and on the Johannesburg Securities Exchange. Brait SE
is not controlled by any firm. In South Africa,
Brait SE controls
Brait South Africa Holdings (Ply) Ltd ("Brait SA Holdings"),
Brait Fund Investments (Ply) Ltd ("Brait
Investments") and
Brait IV Team Partnership GP (Ply) Ltd ("Brait IV Team").
[4]
Drago is a special purpose vehicle incorporated for the purpose of
the proposed transaction and does not conduct any operations.
Brait
SE is an investment holding company. Its investment portfolio
consists of unlisted businesses operating in the broad consumer
sector.
Primary
target firm
[5]
The primary target firm is Active Topco, a company incorporated in
accordance with the laws of the British Virgin Islands. Active
Topco
is jointly controlled by VA Manco Limited ("Manco"), Darwin
Holdings S.A.R.L (eve Seller"), Virgin Group Holdings
and Virgin
Group Investments Limited (collectively referred to as "Virgin").
In South
Africa,
Active Topco controls Virgin Active South Africa Group (Ply) Ltd
which in turn controls Virgin Active South Africa (Pty)
Ltd ("VASA").
[6]
Active Topco's South African operations consist of a national network
of 113 clubs trading under the Virgin Active brand that
offer a range
of fitness and wellness services.
Proposed
transaction and rationale:
[7]
In terms of
the
proposed
transaction,
Drago
intends to acquire the shares
in Active
Topco from Manco, eve Seller and Virgin. Post-merger, Active Topco
will be
jointly
controlled by Brait SE (80%) and Virgin
(20%).
[1]
[8]
Brait SE submits that Virgin Active represents an attractive
investment opportunity as it is one of the world's leading
premium-focused
health club operators. Active Topco submits that the
proposed transaction ties in with Virgin Active's aspirations for
international
growth in both emerging and developed markets and will
enable the company to accelerate its business strategy.
Impact
on Competition:
[9]
The Competition Commission ("Commission") considered the
activities of the merging parties to determine whether
there
are any overlaps and found that there were none. Nor are there any
vertical links between them
[10]
On such basis, the Commission concluded that the proposed transaction
is unlikely to substantially lessen or prevent competition
in the
relevant market.
Public
interest:
[11]
The Commission concluded that there are no public interest concerns
likely to arise from the proposed transaction.
Conclusion:
[12]
In light of the above, we agree with the Commission's analysis and
conclude that the proposed transaction is unlikely to substantially
prevent or lessen competition in the relevant market. In addition, no
public interest issues arise from the proposed transaction.
13
July 2015
DATE
_______________________
Norman
Manoim
Yasmin
Carrim and Medi Mokuena concurring
Tribunal
Researcher:
Ammara Cachalia
For
the merging parties: Chris Charter, DLA
Cliffe Dekker Hofmeyr
For
the Commission:
Prishani Maheeph, Xolela Nokele
[1]
The existing
management
team will
be
retained and will
be
reinvesting
alongside
Brait SE
and the Virgin
Group.