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[2015] ZACT 92
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Bidvest Group Limited v Plumblink SA (Pty) Ltd (LM035Jun15) [2015] ZACT 92 (15 July 2015)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: LM035Jun15
In
the matter between:
BIDVEST
GROUP
LIMITED
Primary Acquiring Firm
And
PLUMBLINK
SA
(PTY)
LTD
Primary Target Firm
Panel
: N Manoim (Presiding Member)
: Y Carrim (Tribunal
Member)
: M Mokuena (Tribunal
Member)
Heard
on
: 1 July 2015
Order
Issued on
: 1 July 2015
Reasons
Issued on
: 15 July 2015
Reasons
for
Decision
Approval
[1]
On 1 July 2015, The Competition Tribunal
('Tribunal")
unconditionally approved the acquisition by Bidvest Group Limited
("Bidvest")
of the entire issued share
capital in Plumblink SA (Pty) Ltd
("Plumblink").
[2]
The reasons for approving the proposed transaction follow.
Acquiring
firm
[3]
The
primary
acquiring
firm
is
Bidvest,
a
company
listed
on
the
Johannesburg
Securities Exchange.
[1]
Bidvest
controls
various
firms
nationally and
internationally.
Relevant
to the
proposed
transaction
is Waco
Industries
("Waco"),
which
is a
division of
Voltex
(Pty) Ltd
("Voltex"),
which
in turn is
a subsidiary of
Bidvest.
[4]
Waco amongst other products provides plumbing and related products
such as solar geysers, electrical geysers, taps, valves,
pipes and
shower heads.
Target
firm
[5]
The target firm is Plumblink, a company wholly controlled by Ethos
Private Equity Fund V
("Ethos").
Plumblink
does not control any firm.
[6]
Plumblink sells plumbing material such as accessories, brassware,
sanitaryware and geysers nationally and internationally.
Proposed
Transaction and Rationale
[7]
Bidvest intends to acquire the entire issued share capital and
shareholders loan of Plumblink. Post-merger Bidvest will have
sole
control of Plumblink.
[8]
According to Bidvest the proposed transaction presents growth
opportunities within the Southern Africa region while the transaction
will allow Plumblink's current shareholders to realise its
investment.
Relevant
Market and
Impact on
Competition
[9]
The Competition Commission
("Commission")
considered
the activities of the merging parties to
determine the relevant market. It found that both the
acquiring firm
and the target firms are active in the market for supply of plumbing
and related products in South Africa. Thus,
the Commission defined
the relevant product market as the national market for the supply of
retailing taps, mixers and plumbing
accessories.
[10]
Although the merging parties are both involved in the supply of
retailing taps, mixers and plumbing accessories, the post-merger
market share will be less than 15% ( with a less than 1% accretion).
During the hearing Mr Howard Greenstein
("Greenstein")
confirmed that Bidvest is focused more on its electrical business
than the sale of plumbing material. Furthermore, Greenstein explained
that the merging parties target different customers, Bidvest supplies
its products predominantly to electrical contractors whereas
Plumblink targets plumbers and end-users.
[11]
The Commission accordingly concluded that the proposed transaction is
unlikely to substantially prevent or lessen competition
in the
relevant market. We agree with this assessment.
Public
Interest
[12]
The transaction does not raise any public interest concerns.
Conclusion
[13]
In light of the above we concluded that the proposed transaction was
unlikely to substantially prevent or lessen competition.
Accordingly
we approved the proposed tranfction unconditionally.
15
July 2015
DATE
________________
Mr
N Maniom
Ms
Y Carrim and Ms M Mokuena concurring
Tribunal
Researcher:
Moleboheng Moleko
For
the merging parties:
Paul Coester and Ahmore Burger Smidt
- Werksmans
For
the Commission:
Shawn
Van der Meulen -- Webber Wentzel Seabelo Molefe and Xolela
Nokele
[1]
Bidvest's
top
shareholders
include:
Public
Investment
Corporation,
JP
Morgan
Asset
Management Group,
Genesis
Investment
Management
Lazard,
Asset
Management LLC
Group
and
Sanlam
Investment
Management.