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[2015] ZACT 82
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Government Employees Pension Fund v Siyanda Resources (Pty) Ltd (LM15Aug15) [2015] ZACT 82 (4 November 2015)
COMPETITION
TRIBUNAL
OF
SOUTH
AFRICA
Case
No:LM
1
1
5Aug15
I
n
the matter between:
GOVERNMENT
EMPLOYEES
PENSION
FUND
Acquiring
Firm
And
SIYANDA
RESOURCES
(PTY
LTD
Target Firm
Panel
: Medi Mokuena (Presiding Member)
:Anton
Roskam (Tribunal
Member)
: Andiswa Ndoni
(Tribunal Member)
Heard
on
: 21 October 2015
Order
I
ssued on
: 21 October 2015
Reasons
I
ssued on
:
4 November 2015
Reasons
for Decision
Approval
[1]
On 21 October 2015, the Competition
Tribunal ("Tribunal") unconditionally approved
the merger between the Government
Employees Pension Fund
("GEPF")
and
Siyanda
Resources (Pty) Ltd
("Siyanda
Resources").
[2]
The reasons
for
approving
the
proposed
transaction
follow.
Parties
to
transaction
and
their
Activities
Primary
acquiring firm
[3]
The primary acquiring firm is GEPF, a juristic person established in
terms of section of the Government Employees Pension Law,
No. 21 of
1996. The GEPF is represented by the Public Investment Corporation
SOC Limited ("PIC") and is controlled by
the GEPF Board of
Trustees. The PIC is wholly-owned and controlled by the South African
Government. GEPF controls a number of firms.
[4]
The GEPF manages and administers pensions and other benefits for
government employees. In doing so, it invests in various classes
of assets Including equity, property and fixed income. The PIC is a
registered financial service provider and the only asset manager
which serves the South African public sector. It is responsible for
the investment needs of a wide range of public sector pension,
provident, social security, development and guardian funds. The PIC
is authorised to manage the equity, bonds, money market and
property
portfolios of the GEPF.
Primary
target firm
[5]
The
primary
target
firm
is Siyanda
Resources,
a
private
company
i
ncorporated
i
n
accordance with the
l
aws
of the Republic of South Africa.
I
t
i
s
controlled by Siyanda
I
nvestments
Management
(Pty)
Ltd
("Siyanda
I
nvestments").
Siyanda
Resources controls a number
of firms.
[6]
Siyanda Resources is a resources investment holding company which
focuses on investments in coal, precious and base metal, industrial
minerals and chrome operations.
Proposed
transaction and rationale:
[7]
The
proposed transaction stems from
a
subscription agreement
and
shareholders
agreement
between Siyanda
I
nvestments
and the PIC. In terms of the subscription agreement, the PIC
acquired
30%
of
Siyanda
Resources'
share capital
whilst
Siyanda
I
nvestments
held 70%. The shareholders agreement provided the PIC with certain
minority rights which were conditional
upon the adoption of the
MOI.
I
n
the
present transaction, the merging parties intend to adopt
the MOL Post-merger, the PIC and Siyanda Investments will have joint
control
over Siyanda Resources.
[8]
The
PIC
submits that the
proposed
transaction presents a sound
i
nvestment
opportunity
which
is
aligned
with
critical
socio-economic
initiatives.
The
Siyanda
Group
submits
that
the
proposed
transaction
ties
i
n
with
i
ts
long-tenn
strategy
to
grow the business
i
nto
a sizable industrial
l
eader
within the South African economy. Further, the business relationship
i
s expected
to be mutually beneficial as the group will utilise the in-house
skills to develop various projects to the benefit of
both parties and
the South
African
economy as a whole.
I
mpact
on
Competition:
[9]
The
Competition
Commission
("Commission")
considered
the
activities
of
the
merging parties and found that there are
no overlaps between them. The target finn
is an investment
company with interests in the mining
sector.
I
t
holds
i
nterests
in
the
markets for
chrome
mining, ferrochrome
producing and
platinum
mining whilst
the
PIC
does not hold any controlling
i
nterests
i
n
finns that are active in
these markets.
[10]
The
Commission therefore
concluded that
the
proposed
transaction
i
s
unlikely
to
substantially lessen or prevent competition in
the relevant market.
Public
Interest:
[11]
The Commission concluded that there are
no public interest concerns l
i
kely
to arise from the proposed
transaction.
Conclusion:
[12]
I
n light
of the above, we agree with the Commission's analysis and concl
u
de
that the proposed transaction
is
unlikely to substantially prevent or
l
essen
competition in the relevant market.
I
n
addition, no public i
n
terest
issues arise
from
the proposed transaction.
4
November 2015
DATE
______________________
Medi
Mokuena
Anton
Roskam
and
Andiswa
Ndoni
concurring
Tribunal
Researcher:
Ammara Cachalia
For
the merging
parties:
Ahmore Burger-Smidt, Werksmans
Attorneys
Shawn van der Meulen, Webber Wentzel Inc.
For
the Commission:
Thato
Mkhize