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[2016] ZACT 66
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Kkr Dvb Aviation Capital Limited v AerCap Holdings N.V.; In re: A Portfolio of 37 Aircraft (LM051JUN16) [2016] ZACT 66 (17 August 2016)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: LM051Jun16
I
n
the
matter
between:
KKR
DVB AVIATION
CAPITAL
LIMITED
Primary Acquiring Firm
and
AerCap
H
OLDINGS
N
.
V.
I
N
RESPECT OF
Primary
Target
Firm
A
PORTFOLIO OF 37 AIRCRAFT
Panel
:
Norman
Manoim
(Presidi
n
g
Member)
: Medi Mokuena
(Tribunal Member)
: Andiswa
Ndoni (Tribunal
M
ember)
Heard
on
: 20
Ju
l
y
2016
O
r
der
I
ssued
on
: 20
Ju
l
y
2016
Reasons
I
ssued
on
: 17 August 2016
Reasons
for Decision
Approval
[1]
On 20 July 2016, the Competition
Tribunal ("Tribunal")
approved the
proposed
transaction
between KKR DVB Aviation Capital L
i
m
i
ted
and AerCap
Holdings
N
.
V.
i
n
respect of a portfolio of 37 aircraft.
[2]
The reasons for approving the proposed transaction follow
.
Parties
to proposed transaction
Primary
acquiring firm
[3]
The primary acquiring firm is KKR DVB Aviation Capital Limited ("KKR
DVB"), a special purpose vehicle created for
the purpose of the
proposed transaction.
[4]
KKR DVB is controlled by KDAC Aircraft
Finance Limited ("KDAC"), a spec
i
al
purpose veh
i
cle
created for the purpose of the
p
roposed
transaction.
[5]
KKR
DVB
a
n
d
KDAC
are
ultimately
controlled
by
KKR,
a
l
i
mited
partnersh
i
p
i
ncorporated
i
n
accordance
with
the
l
aws
of
the state of
Delaware,
United
States
of America.
[1]
[
6]
KKR
i
s
a global
i
nvestment
firms that offer a broad range of alternative asset funds and other
i
nvestment
products to investors and provide capital market solutions for the
firm,
i
ts
portfol
i
o
companies and other clients.
Through
its various subsidiaries
,
KKR manages investments across multip
l
e
asset
classes
i
ncluding
pr
i
vate
equity
,
real estate,
energy,
i
n
frastructure
,
manufacturing,
I
T,
healthcare,
credit
strate
g
i
es,
hedge funds
and
ca
pi
tal
m
a
rkets
.
Primary
target firm
[7]
The primary
target
firm is
AerCap
H
oldings
N
.
V
.
(
"
AerCap
"
)
i
n
respect
of a portfolio of 37 a
i
rcraft.
AerCap
i
s
a
company
i
ncorporated
under
the
l
aw
of
the
N
etherlands.
The
portfol
i
o
of
37
aircraft
will
collectively
be
referred
to
as
the
"Transferred
Firm
"
.
[2]
[8]
The Transferred
Firm
is
u
ltimately
controlled
by
AerCap,
a
p
u
blic
company
l
i
s
t
ed
on the New York Stock Exchange and as such is not controlled by any
firm
.
[9]
The
Target
F
i
rm
comprise
of
a
p
o
rtf
o
l
io
of
37
aircrafts,
of
which
o
n
l
y
one
(1)
i
s
l
ocated
i
n
S
outh
Africa
.
Proposed
transaction
and rationale
[10]
The Acquiring Group intends to acquire the Transferred Firm from
AerCap through its subsidiary KKR DVB. On completion of the
transaction, the Acquiring Group will control the Transferred Firm
through KKR DVB.
[11]
The
Acquiring
Group
submits
that
the
proposed
transaction
presents
an
attractive
investment opportunity to expand
i
ts
current portfolio of commercial aircraft.
[12]
AerCap
submits
that
the
proposed
transaction
will
enable
the
Transferred Firm
to
realise
that certain of the aircrafts
i
n
its portfol
i
o
of aircraft at optimal values, which in turn results in
financial benefits to its shareholders.
[13]
As noted, with regards to South Africa, the transaction only involves
the transfer of ownership of one aircraft, which is presently
leased
to Comair South Africa Limited ("Comair'').
I
mpact
on competition
[
1
4]
The Competition Comm
i
ssion
("Commission
"
)
considered the activities of the merging parties and found that no
overlap exists between the parties in respect of South Africa.
This is because the Acquiring Group
i
s
not active in the ownersh
i
p
or
l
easing
of aircraft in South Africa..
[15]
Given the above the Commission concluded that the
proposed transaction
is unl
i
kely
to substantially
prevent
or
l
essen
competition
i
n
any market
i
n
South Afr
i
ca.
[16]
We concur with the Commission
'
s
conclusion
.
Public
interest
[17]
The
merging
parties
confirmed
that
the
proposed
transaction
will
have
no
negative
effect on employment.
[18]
The proposed transaction further raises no other public
i
nterest
concerns. Conclusion
[19]
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 the
proposed
transaction unconditionally.
17
August 2016
DATE
_________________________________
Mr.
Norman Manoim
Ms
Medi Mokuena and Ms Andiswa Ndoni concurring
Tribunal
Researcher:
Busis
i
we
Masina
F
or
the
merging
parties: Shawn
van der
M
eulen
of
Webber
Wentzel
For
the Commission:
Billy Mabatamela and Xolela Nokele
[1]
KKR
i
s
ultimatel
y
con
tro
lled
b
y
K.KR
M
a
n
age
ment
LLC
,
a
g
ene
ra
l
p
a
rtner
of
KK
R.
[2]
T
h
e
Tr
a
nsf
e
rr
e
d
Firm
is
active
in
a
i
rcraft
l
easi
n
g
a
n
d
a
v
ia
tion
finan
c
e
with
a
fleet
of
ove
r
1.
2
00
o
wn
e
d
a
nd
m
a
n
age
d
a
i
r
c
r
aft.
A
ll
a
ir
craft
a
r
e
passe
n
ge
r
airc
r
aft
u
se
d
for
ci
v
i
li
an
p
u
rposes
an
d
l
ease
d
t
o
third
p
a
rti
es
.