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[2016] ZACT 17
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Actis PCC with respect to Berry Cell v Food Lovers Holdings (Pty) Ltd (LM169Oct15) [2016] ZACT 17 (2 March 2016)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No:
LM1690ct15
In
the matter between:
ACTIS
4 PCC
WITH RESPECT TO BERRY CELL
Primary Acquiring Firm
and
FOOD
LOVERS
HOLDINGS
(PTY)
LTD
Primary Target Firm
Panel
: Norman Manoim (Presiding Member)
: Medi Mokuena (Tribunal
Member)
: Andiswa Ndoni (Tribunal
Member)
Heard
on
: 03 February 2016
Order
Issued on
: 03 February 2016
Reasons
Issued on
: 02 March
2016
Reasons
for Decision
Approval
[1]
On 03 February 2016, the Competition Tribunal (''Tribunal")
approved the proposed transaction between Actis 4 PCC with
respect to
Berry Cell and Food Lovers Holdings (Ply) Ltd
[2]
The reasons for approving the proposed transaction follow.
Parties
to proposed transaction
Primary
acquiring firm
[3]
The primary acquiring firm, Actis 4 PCC is a protected cell company
incorporated in accordance with company laws of the Republic
of
Mauritius.
[4]
Actis 4 PCC forms part of the Actis Group which is a global equity
investor that manages capital investment on behalf of its
investors
and typically invests in established private businesses, which seeks
to grow through both organic and acquisitive growth.
In South Africa,
the Actis Group investee entities are involved in the energy,
industrial, consumer and financial services sector.
Primary
target
firm
[5]
The primary target firm is Food Lovers
Holdings (Pty) Ltd ("FLM Holdco"),
a newly incorporated special vehicle (SPV) company, established
for the purpose of acquiring and holding the grocery
retail,
distribution and franchise operations of Fruit & Veg City
Holdings ("FVC Holdings"). FLM Holdco is not controlled
by
any firm.
[6]
FVC Holdings subsidiaries are involved in services such as
wholesaling, distribution and/or the retail of fresh produce,
groceries,
beverages and other food-related and ancillary products to
end customers.
Proposed
transaction
and
rationale
[7]
Actis 4 PCC intends to acquire 30% of the entire issued ordinary
share capital of Food Lovers Holdings ("FLM Holdco")
through a sale and/or a subscription of shares in FLM Holdco.
Following which Actis 4 PCC will have joint control
of FLM Holdco.
[8]
The
other
minority
shareholders
will
collectively
account
for
70%
of
the
remaining
shares.
[1]
[9]
Actis 4 PCC submits that the proposed transaction is a good
investment and wished to invest in the retail sector.
[10]
The merger will allow the existing shareholders in FLM Holdco to
realize some of their investments and to allow for the introduction
of a new shareholder which will enable it to expand its business
activities.
Impact
on competition
[11]
The Acquiring Group's (Actis Group) current investments are in the
energy, industrial, consumer and financial services sectors.
The
Target Firm (Food Lovers Holdings) is involved in the wholesale,
distribution and/or retail of fresh produce, groceries,
beverages and other food-related and ancillary products to end
customers.
[12]
The Commission considered the activities of the merging parties and
found that the proposed transaction will not result in
any horizontal
overlap. Whilst the Actis Group owns interests in ventures conducting
food operations in China, South East Asia
and Egypt respectively, it
does not own any investments or interest in firms involved in the
retailing, franchising or the distribution
of fresh produce,
groceries, beverages and food-related products in South Africa.
[13]
The Commission therefore concluded that the proposed transaction is
unlikely to lead to a substantial prevention or lessening
of
competition in the market
[14]
We concur with the Commission's conclusion that the proposed
transaction is unlikely to substantially prevent or lessen
competition
in any relevant market.
Public
interest
[15]
The merging parties confirmed that the proposed transaction will not
result in any adverse impact on employment.
2
[16]
The proposed transaction further raises no other public interest
concerns.
Conclusion
[17]
In light of the above, we conclude 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 approve
proposed
transaction unconditionally.
02
March 2016
DATE
_________________________
Mr.
Norman Manoim
Mrs
Medi Mokuena and Ms Andiswa Ndoni concurring
Tribunal
Researcher:
Busisiwe Masina
For
the merging parties:
Webber Wenzel Attorneys
For
the Commission:
Rakgole Mokolo
[1]
The
founding
family
the
Coppin's
own the
largest
amount
of the
remaining
shares
2