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[2015] ZACT 67
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Traxy's Africa (Pty) Ltd v Metmar Limited (LM010Jun15) [2015] ZACT 67 (4 August 2015)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: LM040Jun15
In
the matter between:
TRAXYS
AFRICA
(PTY)
TD
Primary Acquiring Firm
And
METMAR
LIMITED
Primary Target Firm
Panel
: N Manoim (Presiding Member)
:
Anton Roskam (Tribunal Member)
:
lmraan Valodia (Tribunal Member)
Heard
on
: 22 July 2015
Order
Issued on
: 22 July 2015
Reasons
Issued on :
4 August
2015
Reasons
for
Decision
(Non-confidential)
Approval
[1]
On 22 July 2015, The Competition Tribunal
(''Tribunal")
unconditionally approved the acquisition by Traxys Africa (Pty)
Ltd
("Traxys")
of the entire issued share
capital in Metmar Limited
("Metmar'').
[2]
The reasons for approving the proposed transaction follow.
Parties
to the transaction
Acquiring
firm
[3]
The
primary
acquiring
firm
is Traxys,
a company
wholly
owned
by Traxys
S.ar.I
and
ultimately
controlled
by the
Carlyle
Group
L.P.
[1]
Traxys
does
not control
any firm
but
has minor
shareholding
in Lehating
Mining
(Pty)
Ltd,
Siyanda
Chrome
Smelting
Company
(Pty)
Ltd
and Petmin
Lim
i
ted.
Traxys and
its
subsidiaries
will hereon
be referred
to as the Traxys
Group.
[4]
The Traxys Group provides financial and logistical solutions in the
ferro-alloy, metal, mineral, mining and energy industries.
The Traxys
Group trades and sources a diverse range of commodities such as
non-ferrous metals, materials for steel mills.
Target
firm
[5]
The
target firm
is
Metmar,
a
company not
controlled
by
any
one
firm.
[2]
Metmar's subsidiaries include Metmar Investments
and
Resources
(Pty)
Ltd,
Metmar
Global
(Pty) Ltd,
Metmar Trading
(Pty)
Ltd and
Arengo
203
(Pty)
Ltd.
Metmar and
its
subsidiaries
will
hereon
be referred
to as the
Metmar
Group.
[6]
The Metmar Group specialises in the global trade in commodities such
ferrous and non-ferrous metals, minerals, bulk
metals,
alloys, soft commodities, and industrial carbons.
Proposed
Transaction
and
Rationale
[7]
Traxys intends to acquire the entire issued share
capital of Metmar. Post-merger Traxys
will control
Metmar.
[8]
According
to Traxys,
the
proposed
transaction
presents
growth
opportunities
to
enter new
ma
r
·
kets
within the sub-Saharan African region
jmhjjg
[3]
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 there is a horizontal
overlap between the merging parties' activities in the international
market for physical trading of ferroalloys, non-ferrous metals
and
ores.
[10]
The Commission found that the merged entity would have
an estimated market share of 5% (with
an accretion of 1%)
in each of the three markets. The Commission is of the view that the
market shares are low and that the merged
entity post - merger is
unlikely to substantially prevent or lessen competition in any of the
identified markets.
[11]
Furthermore, the markets will continue to face constraints from large
player such as Glencore International AG, Noble Group,
Mertex Canada,
Gunvor International B.V and Mercuria Energy Group Limited.
[12]
The
Commission
found
a
vertical
relationship
as
the
merging
parties
in the
past
12
months
have
bought
and
sold
products to
each other.
Traxys
has
purchased
chrome
from
Metmar
accounting
for
[less than
5%]
[4]
of
the
Metmar
Group
turnover
whilst
the
Metmar
Group has
purchased
zinc metal
on
accounting
for [less
than
5%]
[5]
of
Traxys
annual
turnover.
The
Commissions
is
of
the
view
that
the
amounts are
relatively
small
and
the
proposed
transaction
would
not
lead to
any
foreclosure concerns.
[13]
The Commission accordingly concluded that the proposed transaction is
unlikely to substantially prevent or lessen competition
in the
relevant markets. We agree with this assessment.
Public
Interest
[14]
The transaction does not raise any public interest concerns.
Conclusion
[15]
In light of the above we concluded that the
proposed transaction was unlikely to
substantially
prevent or .lessen competition. Accordingly we approved the proposed
·
4
August 2015
DATE
__________________
Mr
N Manoim
Mr
A Roskam and Prof I Valodia concurring
Tribunal
Researcher:
Moleboheng Moleko
For
the merging parties: Rick
van Rensburg - Edward Nathan Sonnenbergs Inc.
For
the Commission:
Nolubabalo Myoli and Nompucuko
Nontombana
[1]
Traxys S.ar.I is
wholly
owned by
T-1
Holdings S.ar.I. in turn T-1 Holdings is a wholly owned by Metals
Cayman
Holdco Ltd. Metals Cayman is wholly owned by Metals Holdco Ltd, in
turn Metals Holdco Ltd is controlled by the funds managed
by
affiliates of the Carlyle Group L.P.
[2]
Metmar's five
largest
shareholders
include:
Wasat
Investments
(Ply)
Ltd, Mr
PP
Boshoff.
Mr
GP
Lotis, Mr
DJ Ellwood and Coronation Fund Managers.
[3]
Claimed as confidential
[4]
Claimed as confidential
[5]
Claimed as confidential