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[2015] ZACT 84
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Actis 4 PPC with respect to Mahogany Cell v Coricraft Group (Pty) Ltd (LM118Aug15) [2015] ZACT 84 (4 November 2015)
COMPETITION
TRIBUNAL
OF
SOUTH
AFRICA
Case
No: LM118Aug15
I
n
the
matter
between:
ACTIS
4 PPC
with respect to
Mahogany
Cell
Acquiring
Firm
And
CORICRAFT
GROUP
(PTY)
LTD
Target Firm
Panel
:
Medi
Mokuena
(Presiding
Member)
: Anton Roskam
(Tribunal Member)
:Andiswa
Ndoni (Tribunal
Member)
Heard
on
: 21 October 2015
Order
Issued on
: 21 October 2015
Reasons
Issued on
: 4 November 2015
Reasons
for Decision
Approval
[1]
On 21 October 2015, the Competition Tribunal ("Tribunar)
unconditionally approved
the
merger between Actis 4 PPC with respect to the Mahogany Cell ("Actis
4 PCC")
and
the Corlcraft Group
(Pty) Ltd
("Coricraft").
[2]
The reasons for approving the proposed transaction follow.
Parties
to transaction and their Activities
Primary
acquiring firm
[3]
The primary acquiring firm
i
s
Actis 4 PCC, a protected cell company
i
ncorporated
under the
l
aws
of the
Republic
of
Mauritius.
Actis
i
s
advised
by
Actis
managed
fund
which
comprises Actis Africa 4 LP ("Actis Africa") and Actis
Global 4 LP ("Actis Global"). Actis
Africa
and
Actis Global are managed by Actis GP LLP which
i
s
advised by Actis LLP.
I
n
South Africa,
the
Actis
Group
controls a
number
of firms whilst
Actis
4
PCC
controls
Compuscan
Holdings (Pty) Ltd
and
Tekkie
Town
(Pty) Ltd.
[4]
The Actis Group is a global private equity investor and is active in
a wide range of industries. In South Africa, the Actis
Group
currently holds investments in the energy, industrial, consumer and
financial services sector.
Primary
target firm
[5]
The primary target firm is Coricraft, a company incorporated in
accordance with the laws of the Republic of South Africa. Coricraft
is controlled by Westbrooke Investments (Pty) Ltd ('Westbrooke").
It controls a number of firms.
[6]
The Coricraft Group is engaged in the following activities:
•
The
manufacture
and
retail
of
household
furniture;
•
I
t
i
mports,
manufactures and retails household l
i
nen
and bedroom accessories; and
•
The
retail
of
beds
and
mattresses.
Proposed
transaction and rationale:
[7]
I
n
terms of the proposed transaction, Actis 4 PCC will acqu
i
re
49% of the entire
i
ssued
ordinary
share
capital
of
Coricraft.
Post-merger,
Coricraft
will
be
joi
n
tly
controlled
by
Actis 4 PCC.
[1]
[8]
Actis 4 PCC submits that
i
t
seeks to acquire a significant share
i
n
a market
l
eading
home retailer
in
South
Africa
and
that
the
target
business
has
strong
potential for
growth.
Further, as a consumer business,
i
t
provides a sound investment opportunity. The target firm submits that
the proposed transaction will enable
Westbrooke to real
i
se
a portion of
i
ts
i
nvestment
i
n
Coricraft whilst simultaneously facilitating the company's
growth post merger.
Impact
on Competition:
[9]
The Competition Commission ("Commission") considered the
activities of the merging parties and found that there are
no
overlaps between them as the acquiring group does not hold any
interests in firms that are active in the same markets as the
target
group.
[10]
On such basis, the Commission concluded that the proposed transaction
is unlikely to
substantially
l
essen
or prevent competition
i
n
any of
the
affected markets.
Public
interest:
[11]
The Commission found that the proposed transaction does not raise any
public interest concerns.
Conclusion:
[12]
In light of the
above,
we
agree
with the
Commission's
analysis and conclude that the
proposed
transaction
i
s
unlikely
to
substantially
prevent
or
l
essen
competition
in
the
relevant
market.
I
n
addition,
no
public
interest
i
ssues
arise from
the
proposed transaction
.
04
November 2015
DATE
___________________
Medi
Mokuena
Anton
Roskam and Andiswa
Ndoni
concurring
Tribunal
Researcher:
Ammara
Cachalia
For
the
merging
parties:
Shawn van der Meulen, Webber
Wentzel
For
the Commission:
Xolela Nokele
[1]
Coricraft's
post-merger shareholding
structure
will be
as
follows:
Actis 4 PCC (49%),
Westbrooke
(44.93%)
and Kenstall
I
nvestments
(Pty) Ltd (4.49%). Kenstall
I
nvestments
(Pty) Ltd
was
a shelf company prior
to
the
proposed
transaction.