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[2015] ZACT 103
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Kilimanjaro Sakhumnotho Consortium (Pty) Ltd v Main Street 87 Proprietary Limited (LM130Sep15) [2015] ZACT 103 (19 November 2015)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No:
LM130Sep15
In
the matter between:
Kilimanjaro
Sakhumnotho
Consortium
(Pty)
Ltd
Primary Acquiring Firm And
Main
Street
87 Proprietary
Limited
Primary Target Firm
Panel
: Yasmin Carrim (Presiding Member)
: Andiswa Ndoni {Tribunal
Member)
: Anton Roskam (Tribunal
Member)
Heard
on
: 28 October 2015
Order
issued
:on 28 October 2015
Reasons
issued on
:19 November
2015
Reasons
for Decision
Approval
[1]
On 28 October 2015, the Competition Tribunal ("Tribunal")
unconditionally approved the large merger between Kilimanjaro
Sakhumnotho Consortium ("Consortium") and Main Street 87
Proprietary Limited (Main Street").
[2]
The reasons for approving the transaction follow.
Parties
to the transaction
[3]
The
primary
acquiring
firm
is
the
Consortium,
a
firm
incorporated
in
accordance with
the laws of
the
Republic
of
South
Africa
("RSA"). The
Consortium
is
jointly
controlled
by
Kilimanjaro
Capital
Proprietary
Limited
("KiliCap")
and Mpilo Oil & Gas Proprietary Limited ("Mpilo O&G").
KiliCap is
controlled
by
Shira
Holdings
Proprietary
Limited
("Shira
Holdings").
Shira
Holdings
is
not
controlled
by
any
firm.
Mpilo
O&G
is
controlled
by
Sakhumnotho
Oil & Gas (Pty) Ltd ("Sakhumnotho O&G").
Sakhumnotho O&G is
controlled
by
Sakhumnotho
Group
Holdings (Pty) Ltd ("Sakhumnotho
Group").
Sakhumnotho
Group is
controlled by the Sipho Mseleku Trust. The Consortium has been
established
solely for this transaction and thus conducts no business activities.
Mpilo O&G
and KiliCap
have no
other
business
operations
outside of this transaction.
Shira
Holdings is a 100% black owned
and
managed
investment holding
company and
i
ts
only
investment
is
in
KiliCap. The Sakhumnotho Group has various investments in a wide
range of sectors such as
financial
services, mining and resources, oil and gas, property
aviation
and manufacturing amongst others.
Although at
the
time
of
the
merger
filing Sakhumnotho
O&G
held
shareholding
interests
in Natural
Resources Corporation
South
Africa
("NCRSA")
and Oil of
Africa,
during the
hearing the
merging
parties
brought to
our
attention
that
Sakhumnotho
has
abandoned
their
interests in
these oil
blocks and no longer
holds such
interests
in Nigeria
and Libya.
[1]
Sakhumnotho
also has an
interest in Nu Fuel
Proprietary
Limited
("Nu
Fuel"},
a
firm
that
is
active
in
the
production
of
pyrolysis oil, solid residue, and low-grade carbon black.
[4]
The primary target firm is Main Street, a private firm incorporated
in accordance with the laws of RSA Main Street is controlled
by
TOSACO Proprietary Limited ("TOSACO"). TOSACO is controlled
by Calulo Energy Investments Proprietary Limited ("Calulo
Energy
Investments"). Calulo Energy Investments is controlled by Calulo
Energy Proprietary Limited ("Calulo Energy").
Calulo Energy
is controlled by Calulo Petrochemicals Proprietary Limited ("Calulo
Investments"). Although Main Street
does not control any firm,
its sole business activity is to hold 25% shares in Total South
Africa (Pty) Ltd (''TSA"). TSA
operates in the petroleum
industry in South Africa, Namibia, Botswana, Lesotho and Swaziland.
Proposed
transaction and rationale
[5]
The proposed transaction will facilitate an exit of the
existing BEE shareholders Total South Africa (Pty) Ltd ("TSA")
and introduce a new consortium of BEE shareholders into the
shareholding structure of TSA. Through the proposed transaction, the
Consortium intends to acquire 91.8% of shareholding in Main Street
from TOSACO. Post-merger, the Consortium will control Main Street
and
indirectly jointly control TSA.
[6]
The acquiring group submits that the proposed transaction is in line
with its investment focus in the oil and gas markets. The
target
group on the other hand submits that its shareholders have taken a
decision to focus on building controlling positions in
investments
with greater operational control and on exiting an institutional
shareholding.
Competition
assessment
[7]
The Competition Commission ("Commission") considered the
activities of the merging parties and found that there is
a
horizontal overlap, as both merging parties are active in the broad
oil and gas market. TSA is active in South Africa, Namibia,
Botswana,
Lesotho and Swaziland. The firms in which the acquiring firm has
interests are only active in Libya and Nigeria. The
Commission
concluded that there is no geographic overlap arising from the
proposed transaction, and decided not to assess the overlap
any
further. As mentioned in paragraph 3 above, the interests of
Sakhumnotho in Libya and Nigeria have been abandoned. We are of
the
view that this does not impact on the Commission's analysis of the
proposed transaction and thus agree with the Commission
that the
proposed transaction will not substantially prevent or lessen
competition in any market.
Public
interest
[8]
The merging parties confirmed that the proposed transaction will not
have any adverse effect on employment in South
Africa.
[2]
[9]
The proposed transaction raises no other public interest concerns.
CONCLUSION
[10]
We agree with the Commission's finding that the proposed transaction
is unlikely to substantially prevent or lessen competition
in any
relevant market. We therefore approve the proposed transaction
without conditions.
19
November
2015
DATE
_______________________
Ms
Yasmin Carrim
Ms
Andiswa Ndoni and Ms Anton Roskam concurring
Tribunal
Researcher:
Caroline Sserufusa
For
the merging parties:
Ahmore Burger-Smidt of Werksmans Attorneys
For
the Commission:
Thato Mkhize
[1]
See page
4 of the
Transcript
of the
hearing.
[2]
See pages 76 of the merger record