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[2016] ZACT 64
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Super Group Trading Proprietary Limited v Certain Motor Vehicle Dealerships in the Western Cape owned and operated by Sandown Motor Holdings Proprietary Limited and Others (LM043JUN16) [2016] ZACT 64 (12 August 2016)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: LM043Jun16
In the matter
between:
SUPER GROUP
TRADING PROPRIETARY LIMITED
Acquiring Firm
And
CERTAIN MOTOR
VEHICLE DEALERSHIPS IN
THE
Target
Firm
WESTERN CAPE
OWNED AND OPERATED BY SANDOWN
MOTOR
HOLDINGS PROPRIETARY LIMITED AND ERVEN
6253 AND
6254, MONTAGUE GARDENS HELD UNDER DEED
OF TRANSFER
T8105/2007 AND T8106/2007 CURRENTLY
OWNED BY
KOPPIEVIEW PROPRIETARY LIMITED
Panel
: Norman Manoim (Presiding Member)
: Medi Mokuena (Tribunal Member)
: Andiswa Ndoni (Tribunal Member)
Heard
on
: 20 July 2016
Order Issued
on
: 20 July 2016
Reasons Issued
on
: 12 August
2016
NON-CONFIDENTIAL
REASONS FOR DECISION
APPROVAL
[1] On 20 July
2016, the Competition Tribunal approved the large merger between
Super Group Trading Proprietary Limited ("SGT")
and Certain
Motor Vehicle Dealerships in the Western Cape owned and operated by
Sandown Motor Holdings Proprietary Limited ("the
target
businesses") and Erven 6253 and 6254, Montague Gardens held
under deed of transfer T8105/2007 and T8106/2007, currently
owned by
Koppieview Proprietary Limited ("the target property").
[2] The reasons
for the approval follow.
PARTIES TO
THE TRANSACTION AND THEIR ACTIVITIES
Primary
Acquiring
Firm
[3] The
primary
acquiring
firm
is
SGT,
a
private
company
incorporated in accordance
with
the laws
of
the
Republic
of
South
Africa. SGT
is
a
wholly owned subsidiary
of Super
Group
Holdings
(Pty) Ltd ("Super
Group
Holdings") which
is
ultimately
controlled
by
Super
Group
Limited
("Super
Group").
Super Group
is
listed
on
the
JSE
[1]
and
apart
from
Super
Group
Holdings,
does
not
control
any other firm
in South Africa.
[4] Super Group
is a supply chain mobility company concerned with the optimisation of
supply chain processes and vehicle fleets.
Its dealership division
consist of forty-three franchised motor dealerships based in the
Gauteng, Mpumalanga and North West Provinces.
Super Group also sells
parts and accessories, pre-owned and demonstration motor vehicles and
provides maintenance and repairs in
respect of motor vehicles.
Primary
Target Firm
[5]
The
target businesses
are
motor
vehicle
dealerships
l
ocated
in
the
Western Cape
Province,
[2]
owned
and
operated by
Sandown Motor
Holdings
(Pty)
Ltd
(SMH), which
sell
new and
used passenger vehicles,
new commercial vehicles and
provide
after
sales
services.
SMH
is
controlled
by
Mercedes-Benz
South Africa
Limited (MBSA) (62.625%) which
is in turn
controlled
by Daimler AG.
[6]
The
property
is
a
purpose
built
car
dealership
which
comprises
showrooms, workshops
and
offices.
Situated
at
Century
Boulevard,
Mercantile
Road Crescent Century City, Cape Town
7441,
[3]
currently owned
by
Koppieview
Proprietary
limited
("Koppieview").
[4]
PROPOSED
TRANSACTION
AND
RATIONALE
[7] The proposed
transaction involves an acquisition by SGT of the target businesses
from SMH as a going concern and the acquisition
of property from
Koppieview. Upon implementation SGT will control the target
businesses and target property.
[8] In terms of
rationale, SGT submitted that it wishes to expand its vehicle
dealership business by entering the Western Cape market,
identifying
the target businesses as suitable to fulfilling such a desire.
[9] SMH
submitted that
[..
.
]
[5]
RELEVANT
MARKETS AND
IMPACT
ON COMPETITION
[10] In its
analysis, the Commission found a horizontal overlap in the
differentiated product sub-markets markets of the sale of
new
passenger vehicles and the sale of new commercial vehicles.
[11] As
has
been
established
by the
Tribunal,
[6]
the
product
sub-market
for
the
sale of new
passenger vehicles
[7]
should
be
distinguished
from the sale of new
commercial
vehicles.
[8]
In the
present
matter,
both the
merging
parties
sell
new passenger
and
new
commercial
vehicles
presenting
a
horizontal
overlap.
[12] However
despite this product overlap there is no geographic overlap. Super
Group's dealerships are located in Gauteng and the
target businesses
are located in the Western Cape, outside of even the broad 'regional'
geographic market presented by the Commission.
[13] The
proposed merger thus does not create any competition concerns.
CONCLUSION
[14] Although
presenting horizontal overlaps in the market for the sale of new
passenger and commercial vehicles, the lack of geographic
overlap
renders the effects of such market overlap nugatory.
[15] The merger
will not substantially prevent or lessen competition in the market
for new and used passenger and commercial vehicles
in the Western
Cape region.
[16] The
proposed transaction does not raise any public interest concerns.
[17]
Accordingly, we approved the transaction without conditions.
12
August 2016
Date
__________________________
Norman Manoim
Medi MUuena
and Andiswa Ndoni concurring
Tribunal
Researcher:
Alistair Dey-Van
Heerden
For the
Acquiring firm:
Fluxmans Attorneys
For the Target
Firm:
Baker
&
McKenzie
For the
Commission:
Zintle Siyo and Xolela
Nokele
[1]
The
top
five
shareholders
in Super
Group
at
30
June
2015
are
as follows:
Allan
Gray
(Pty)
Ltd (19.79%);
Public Investment Corporation (13.19%); Government Employee Pension
Fund (13.67%); Prudential Portfolio Management
(6.29%);
Visio Capital
Management
(5.71%).
[2]
Mercedes-Benz Century City, located at Century Boulevard,
Mercantile Road Crescent, Century City, Cape Town; Mercedes Benz
Culemborg, located at Christiaan Barnard Street, Foreshore, Cape
Town; Mercedez-Benz Claremont, located at 3 Main Road, Cleremont,
Cape Town; Eikestad Motors, located at 113 Bird Street,
Stellenbosch; Paarl Motors, located at Zandwyk Park, Old Paarl Road
(R101), Paarl And EK Green Street, Hugenout, Paarl; Mercedes-Benz
Commercial Vehicles Cape Town, located at Montague Drive Montague
Gardens Cape Town; Mercedez-Benz Commercial Vehicles Bellville,
located at Corner of Isotope and Bridge Streets, Bellville, Cape
Town; Chrysler Jeep Dodge Century City, located at Century
Boulevard, Mercantile Row Crescent, Century City, Cape Town; Orbit
Boland Worcester, located at 5 Louis Lange Street, Worcester.
[3]
Being
Erven
6235
and
6254,
Montague
gardens,
held
under
deed
of
Transfer
T8105/2007
and T8106/2007.
[4]
A private company incorporated in accordance with the laws of the
Republic of South Africa.
[5]
Certain information has been claimed as confidential by
the merging
parties and has thus been removed from the Tribunal's public
reasons.
[6]
See
JRL
Auto
Traders
(Pty) Ltd and
Part of the
Business
of Lindsay Saker
Volkswagen
Hyde
Park currently
held
by
Imperial
group
limited
LM126Feb09;
Janterwick
investments
(Pty)ltd
and the general
Motors franchise
Business
of Anderson
Motors
Ladysmith
LM106Feb07.
[7]
Passenger
vehicles
are defined
as entry
level cars, small
cars, lower
middle cars,
upper
middle cars,
large cars,
lower
luxury cars,
upper
luxury cars,
upper
speciality
cars,
small
utility cars,
lower
middle utility
cars
and
small
minivans.
[8]
Commercial vehicles are defined as light commercial vehicles
(includes pickup vans and all commercially based good or passenger
carriers Le minibuses), medium commercial vehicles and heavy
commercial
vehicles.