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[2016] ZACT 18
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Accenture (South Africa) Proprietary Limited and Others v Competition Commission (SM154Oct15) [2016] ZACT 18 (27 January 2016)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No.:
SM1540ct15
In
respect of the request for consideration of the conditionally
approved merger under the Competition Commission's case number
2015Sep0503 between:
Accenture
(South Africa) Proprietary
Limited
First
Applicant
Accenture
Holdings
B.V.
Second Applicant
Edcon
Limited
Third Applicant
("The
Acquiring Firms")
The
Consumer Credit and Collection
First
Applicant Second Appl icant Third Applicant
Services
Joint
VenturBs
Fourth
Applicant
("The
Target Firm")
and
The
Competition
Commission
Respondent
Panel
: N Manoim (Presiding Member)
A Roskam (Tribunal
Member)
A Ndoni (Tribunal Member)
Heard
on
: 15 December 2015
Decided
on
: 15 December 2015
Reasons
issued on
: 27 January 2016
Reasons
for Decision
Approved
subject to
conditions
[1]
On 20 October 2015, the merging parties, namely, Accenture (South
Africa) Proprietary Limited ("Accenture SA") , Accenture
Holdings B.V. (collectively referred to as the Accenture Group) and
Edcon Limited ("Edcon") and the acquiring firm The
Consumer
Credit and Collection Services Joint Ventures ("Joint Venture")
filed an application
in terms of
section 16(1)(a)
of the
Competition Act No. 89 of 1998
requesting the Competition
Tribunal ("Tribunal") to reconsider their small
merger that was approved subject
to conditions by the Competition
Commission ("Commission") on 6 October 2015.
[2]
On 15 December 2015, the Competition
Tribunal ("Tribunal") conditionally
approved the merger between the merging parties for the reasons to
follow.
Parties
to transaction
Primary
acquiring firm
[3]
The Accenture Group is
a
global organization which provides
management consulting, technology and outsourcing activities. In
South Africa, Accenture
SA provides advisory services to
companies in order to maximise their operating performance by
developing and implementing technology
to improve productivity and
efficiency.
[4]
Edcon is a large clothing retailer trading through a range of retail
formats in and around South Africa.
Primary
target firm
[5]
The target firm is a newly established joint venture which was
established to provide consumer credit and collection services
to
third-party customers locally and abroad. The Joint Venture would
provide these services to customers such
as banks,
fast moving consumer goods such as clothing retailers and other
consumer focused companies.
Background
[6]
During the Commission's investigation of the proposed transaction it
found that there was no horizontal overlap and that the
proposed
transaction would unlikely lead to any vertical
foreclosure concerns post-merger.
Instead,
the Commission's concern intended to address the potential harm
of the acquiring firm being used as a conduit
for information
exchange between Edcon and its competitors in the retail sector as
the acquiring firm could provide consumer credit
and collection
services to competing clothing retailers.
[7]
In addressing this harm the Commission proposed that the merger
be approved subject to, amongst others, the following
conditions:
"The
directors
appointed
to
the
board
of
the
Target
Firms
shall
not
be
appointed,
invited
and/or
attend
meeting
of
the
board
and/or management
committees(s)
of
Edcon"'
and
'The
employees, management and executive and non-executive directors
of the Target Firms shall not be involved in Edcon's
retail and other
operations nor attend any meetings"
[8]
The above-mentioned conditions were communicated to the merging
parties during October 2016 and were subsequently approved
and a
merger certificate was duly issued. The merging parties submitted
that the merger was approved prematurely and that the above-mentioned
merger conditions would be burdensome for Edcon as it does not have
sufficient executive and management staff available for
it to
have mutually exclusive boards with the
·
Joint Venture. The merging parties sought to apply to the Tribunal
for request for consideration.
[9]
Subsequent to the merging party's filing their request for
consideration with the Tribunal they suggested alternative conditions
to remedy the possibility of information exchange. The conditions
include provisions where the merging parties undertake to partition
and separate Edcon's retail operations from the Joint Venture, the
implementation of Chinese walls to ensure that information is
not
exchanged and an undertaking that employees and management of the
Joint Venture would not be involved in Edcon's retail operations.
[10]
These alternative conditions were
acceptable to the
Commission
who
confirmed
this
in
a
l
etter
confirming to the Tribunal.
[1]
[11]
As the merging parties and the Commission are in agreement on the
proposed conditions and as no contrary
facts
were presented to us, the
Tr
ibunal
grants the consideration subject to the proposed conditions.
27
January
2016
DATE
_________________________
Mr
Norman Manoim
Mr
nton Roskam and Ms Andiswa Ndoni concurring
Tribunal
Researcher:
Aneesa Ravat
For
the merging parties: Chris Charter of
Cliffe Dekker Hofmeyr for the first afld second applicants
and Graeme
Wickins of Vverksmans attorneys for the third applicant
For
ttie Commission:
Gilberto Biacuana
[1]
Inter
alia
merger record page 38-39