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[2016] ZACT 9
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Al Noor Hospitals Group PLC v Mediclinic International Limited (LM167Oct15) [2016] ZACT 9 (25 February 2016)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: LM1670ct15
In
the matter between:
AL
NOOR HOSPITALS GROUP PLC
Primary Acquiring Firm
and
MEDICLINIC
I
NTERNATIONAL
LIMITED
Primary Target Firm
Panel
: Yasmin Carrim (Presiding Member)
: Medi Mokuena (Tribunal
Member)
: Andiswa Ndoni (Tribunal
Member)
Heard
on
: 27 January 2016
Order
Issued on
: 27 January 2016
Reasons
Issued on
: 25 February
2016
Reasons
for Decision
Approval
[1]
On 27 January 2016, the Competition Tribunal
("Tribunal") approved the proposed transaction
between Al Noor Hospitals Group Pie and Mediclinic International
Limited.
[2]
The reasons for approving the proposed transaction follow.
Parties
to proposed transaction
Primary
acquiring firm
[3]
The primary acquiring firm is Al Noor Hospitals Group Pie ("Al
Noor"), a firm registered in England and Wales with
a listing on
the London Stock Exchange ("LSE"). Al Noor and the firms
under its control ("Acquiring Group")
currently have no
direct or indirect presence in South Africa.
[4]
Al Noor operates three (3) hospitals, seventeen (17) medical centers
and clinics, primarily located in Abu Dhabi in the United
Arab
Emirates ("UAE"), with one (1) further clinic in Muscat,
Oman.
Primary
target firm
[5]
The primary target firm is Mediclinic International Limited
("Mediclinic"), a company incorporated in accordance with
the company laws of the Republic of South Africa with a listing on
the securities exchange operated by the Johannesburg Securities
Exchange Limited ("JSE"). Mediclinic is not controlled,
directly or indirectly by any one person or firm.
[6]
Mediclinic currently has three operating platforms in Southern Africa
(South Africa and Namibia), Switzerland and the United
Arab Emirates
as well as a minority stake in a United Kingdom listed hospital
company. Mediclinic Southern Africa (Ply) Ltd ("MCSA")
operates forty nine (49) hospitals throughout South Africa and three
(3) in Namibia.
Proposed
transaction and rationale
[7]
Al Noor and Mediclinic intend to enter into a transaction whereby Al
Noor will offer to acquire all the shares in Mediclinic,
with the
existing Mediclinic shareholders ultimately receiving shares in Al
Noor. The transaction step whereby Mediclinic will
become a
wholly-owned subsidiary of Al Noor will be by way of a scheme of
arrangement in terms of section 114 of the Companies
Act 71 of 2008
("Scheme").
[8]
Al Noor submits that the transaction will provide opportunities for
further growth. Mediclinic submits that the transaction
presents the opportunity to demonstrate leadership in the
international market.
Impact
on competition
[9]
The Competition Commission ("Commission") submits that
there is a horizontal overlap in the activities of Al Noor
and
Mediclinic in the product market for the provision of private
healthcare services. However, the Commission found that
there
is no geographical overlap as the Acquiring Group has no direct or
indirect presence in South Africa.
[10]
The Commission finds that the proposed transactions will not change
the structure of the market nationally. It further finds
that
Mediclinic will continue to compete with private hospitals in South
Africa such as Netcare, Life Healthcare, and independent
hospitals
[11]
The Commission therefore concluded that the proposed transaction is
unlikely to substantially prevent or lessen competition
in any
relevant market.
[12]
At the hearing of the matter the merging parties submitted, in
response to queries raised by the Tribunal that the transaction
will
not result in any changes to the management or the corporate
structure of the South African operations. Nor will it impact
in any
way on BEE requirements. Furthermore, in terms of the transaction,
the only anticipated change is that the holding company
will now
become listed on the LSE.
Public
interest
[13]
The Primary Acquiring Firm does not employ any employees in South
Africa. It is the merging parties' strategic intent for Mediclinic
to
retain its corporate head offices in South Africa. The proposed
merger will not have any detrimental effect on employment and
no
retrenchments or job losses are anticipated to result from the
proposed merger in South Africa.
[14]
The proposed transaction further raises no other public interest
concerns.
Conclusion
[15]
In light of the above, we concluded that the. proposed transaction is
unlikely to substantially prevent or lessen competition
in any
relevant market. In addition, no public interest issues arise from
the proposed transaction, Accordingly, we approved the
proposed
transaction unconditionally.
25
February 2016
DATE
__________________________
Ms
Yasmin Carrim
Mrs
Medi Mokuena and Ms Andiswa Ndonl concurring
Tribunal
Researcher:
Kameel Pancham
For
the merging parties:
Cliffe Dekker Hofmeyr
For
the Commission:
Thelani Luthuli