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[2016] ZACT 14
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Government Employees Pension Fund, duly represented herein by the Public Investment Corporation SOC Limited v Mining and Gas Services Proprietary Limited (LM214Jan16) [2016] ZACT 14 (9 March 2016)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: LM214Jan16
In
the matter between:
The
Government Employees Pension Fund, duly
Primary
Acquiring Firm
represented
herein by the Public Investment
Corporation
SOC
Limited
And
Mining
and Gas-
Services
Proprietary
Limited
Primary Target Firm
Panel
: Norman Manoim (Presiding Member)
: lmraan Valodia
(Tribunal Member)
: Fiona Tregenna
(Tribunal Member)
Heard
on
: 17 February 2016
Order
issued on
: 17 February 2016
Reasons
issued on
: 09 March 2016
Reasons
for Decision
Approval
[1]
On 17 February 2016, the Competition Tribunal ("Tribunal")
unconditionally approved the large merger between The Government
Employees Pension Fund ("GEPF" , duly represented
herein by the Public Investment Corporation SOC Limited ("PIC")
and Mining and Gas Services Proprietary Limited ("MOGS").
The reasons for approving the transaction follow.
Parties
to the transaction
[2]
The primary
acquiring firm
is GEPF.
The
GEPF
was
established
in terms
of the
Government Service Pension
Act, 57
of 1973,
which has
been
repealed.
I
t
continues
to
exist
as
a juristic
person
by
virtue
of
the
Government
Employees
Pension
Law,
1996. The
GEPF
is
a
pension
fund
and
has as
its
purpose
the
administration and management of pensions and
other
benefits
for its
members. The GEPF's
funds
are
invested in
a
variety
of
assets,
including
property.
[1]
The
investment of
the GEPF's
assets is
managed by
the Public
Investment Corporation
SOC Limited
("the PIC") in
terms of
an
investment
mandate.
The PIC
manages
the
equity,
bonds,
money
market
and
property
portfolios
of the
GEPF.
[3]
The Khuseni SPV (RF) Proprietary Limited ("Khuseni SPV") is
a special purpose vehicle, which will be formed solely
for the
purposes of the proposed transaction and thus currently does not
conduct any operations.
[4]
The primary target firm is MOGS, which is a South African based,
black-owned, BEE accredited company. MOGS is controlled by
Royal
Bafokeng Holdings Proprietary Limited ("RBH"), which is a
community based investment company with the overall objective
of
maximising returns to enable the delivery of sustainable benefits to
the Bafokeng community. RBH achieves this objective through
a
plethora of subsidiaries and associated companies, such as MOGS. MOGS
focuses on providing various services to the mining (coal,
gold and
platinum), oil and gas sectors through its various interests
and subsidiaries, provides services to mining industries
both within
and outside the borders of South Africa, services to the mining
(coal, gold and platinum), oil -and gas sectors. MOGS
provides these
services via the acquisition of significant interests in and/or the
development of companies operating with the
above mentioned
sectors. These services are provided both within and outside the
borders of South Africa. MOGS is active
in crude oil blending,
operation of petroleum gas importation terminal, pipeline
rehabilitation, manufacture of energy systems
inter alia.
Proposed
transaction
[5]
The proposed transaction entails GEPF, through Kuseni SPV, acquiring
49% shareholding in MOGS. Post-merger Kuseni SPV will have
joint
control over MOGS.
Competition
assessment
[6]
The Competition Commission ("Commission") considered the
activities of the merging parties and found
that no overlaps arises from
the proposed transaction. This is because the
parties,
even through their subsidiaries are not active in the same markets.
The acquiring group's activities in the mining sector
is limited to
non-controlling interests it has in various firms active in contract
mining services, material handling, concrete
production, logistics,
banking, insurance, property, and others. Whilst MOGS is active in
crude oil blending, operation of petroleum
gas importation terminal,
pipeline rehabilitation, manufacture of energy systems
inter
alia.
The Commission thus saw no need to conduct
any further analysis. The Commission thus concluded that the proposed
transaction is
unlikely to substantially prevent or lessen
competition in any market. We agree with the Commission on its
findings.
Public
interest
[7]
The
merging
parties
confirmed
that
the
proposed
transaction
will
not
have any
adverse
effect
on
employment
in
South
Africa,
instead
it
will
have
a
positive
impact
on
employment
as it
has
the
potential
to create
employment in
the
mining
,
oil
and
gas-sectors.
[2]
The
proposed
transaction
raises
no
other
public
inter
e
.
st
concerns.
CONCLUSION
[8]
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.
09
March 2016
DATE
__________________
Mr
Norman Manoim
Prof.
lmraan Valodia and Prof. Fiona Tregenna concurring
Tribunal
Researcher:
Caroline Sserufusa
For
the merging parties: Ryan
Goodman of ENS
For
the Commission:
Reabetswe Molotsi
[1]
See pages 16, 36 and 37 of the merger record.
[2]
See page 71 of the merger record.