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[2016] ZACT 22
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Bongicel (Pty) Ltd v Lusitania Pty Ltd (LM224Jan16) [2016] ZACT 22 (23 March 2016)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No:
LM224Jan16
In
the matter between:
Bongicel
(Pty)
Ltd
Acquiring Firm
and
Lusitania
Pty
Ltd
Target Firm
Panel
: Yasmin Carrim (Presiding Member)
Medi Mokuena Fiona
(Tribunal Member)
Tregenna
(Tribunal-Member)
Heard
on
: 10 February 2016
Order
issued on
:10 February 2016
Reasons
issued on
:
23 March 2016
Reasons
for Decision
Approval
1.
On 10 February 2016 the Competition Tribunal {the "Tribunal")
unconditionally approved an acquisition by Bongicel (Pty)
Ltd
("Bongicel"), of Lusitania (Pty) Ltd ("Lusitania'}
2.
The reasons for the approval of the proposed transaction follow.
The
Parties and their activities
3.
The primary acquiring firm is Bongicel, a newly incorporated special
purpose vehicle company, established for the purpose of
the proposed
transaction. Bongicel is controlled by Moumo Integrated Development
(Pty) Ltd ("Moumo"), which is in turn
ultimately controlled
by the Royal Bafokeng Nation Deveiopment Trust ("the Royal
Bafokeng Trust"), a trust registered
in accordance with the laws
of South Africa. The Royal Bafokeng Trust has in excess of 40
subsidiaries. Bongicel does not control
any firm.
4.
Bongicel is incorporated for the purposes of the proposed transaction
and does not have any activities. The Royal Bafokeng Trust
is an
investment holding trust and its subsidiaries are involved in
services for the mining, oil and gas, resources, construction,
property, telecommunications, transport, aviation, energy, shipping
and courier and financial services sectors.
5.
The primary target firm is Lusitania, a company registered in
accordance with the laws of the Republic of South AfFisa. Lusitania
is wholly-owned by the Pocot Trust ("Pocot Trust").
Lusitania and the Pocot Trust form part of the Kempston Group of
Companies ("Kempston Group"). The Kempston Trust has in
excess of 40 subsidiaries.
6.
Lusitania is involved in the wholesale distribution of frozen and/or
chilled prepared branded meat products, seafood, vegetables,
dairy
goods, desserts, pastries and cakes to the hospitaJity industry-
including hotels, restaurants and caterers.
Proposed
transaction and
rationale
7.
In terms of the proposed transaction, Bongicel intends to acquire as
a going concern, the entire business of Lusitania comprising
of the
entire fixed assets, stock, goodwill, trade names, trademarks and
operations, specifically excluding the book debts and
employee
liabilities. On completion, Bongicel will have sole control over
tusitania.
8.
According to the Royal Bafokeng Trust the proposed transaction will
inter alia
create employment and skills development
opportunities for the Bafokeng people in the agricultural sector.
9.
The Kempston Group submitted that it wants to sell Lusitania so that
it can return its focus to its core areas of expertise,
i.e.
transport, logistics and reritals.
Competition
Analysis
10.
The Commission found that there is no overlap between the activities
of the merging parties as the Royal Bafokeng Trust does
not currently
own investments or interests in firms involved in tile distribution
of frozen and/or chilled food related products
in competition with
Lusitania.
11.
The Commission therefore concluded that the
proposed transaction 1s unlikely
to substantially
prevent or lessen competition in any market.
Public
interest
12.
The merging parties confirmed that the proposed transaction will have
no adverse effect on employment and will not result in
any
retrenchments in South Africa. The proposed transaction raises no
other public interest concerns.
Conclusion
13.
In light of the above, we agree with the Commission that the proposed
transaction is unlikely to substantially prevent or lessen
competition in any market. Further, we agree with the Commission that
proposed transaction is unlikely to resuIt in significant
public
interest concerns. We therefore approve the proposed transaction
unconditionally.
23
March 2016
Date
___________________
Ms
Yasmin Carrim
Ms
Medi Mokuena and Professor Fiona Tregenna concurring
Tribunal
Researcher : lpeleng
Selaledi
For
the merging parties : Mark Thomas of Tabacks Attorneys
For
the Commission:
Maanda Lambani