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[2016] ZACT 75
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Zico Capital Two Proprietary Limited v Goldrush Group Proprietary Limited (LM013APR16) [2016] ZACT 75 (20 September 2016)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: LM013Apr16
In
the matter between:
ZICO
CAPTITAL TWO PROPRIETARY LIMITED
Primary
Acqu
i
ri
n
g
Firm
and
GOLDRUSH
GROUP PROPRIETARY
LIMITED
Primary Target
Firm
Panel
:
Medi
Mokuena (Presiding Member)
: Anton Roskam (Tribunal
Member)
: Andiswa
Ndoni(Tribunal
Member)
Heard
on
:
24
August
2016
O
r
der
I
ssued
on
: 24
August
2016
Reasons
I
ssued
on
:
20
September
2016
Reasons
for Decision
Approval
[
1
]
On
10
August
2016,
the Competition Tribunal ("Tribunal") approved the proposed
transaction
between
Zico
Capital
Two
Proprietary
Limited
and
Goldrush
Group
Proprietary Limited.
[2]
The reasons for approving the proposed transaction follow.
Parties
to proposed
transaction
Primary
acquiring firm
[3]
The primary acquiring firms is Zico Capital Two Proprietary Limited
("Zico Capital"), a firm incorporated in terms
of the laws
of the Republic of South Africa.
[4]
Zico Capital is a newly established firm and does not control any
firm.
Primary
target firm
[5]
The
primary
target
firm
i
s
Goldrush
Group
Proprietary
L
i
m
i
ted
("Goldrush"),
a
firm
incorporated in terms of the laws of the Republ
i
c
of South Africa.
[1]
[6]
Goldrush controls two firms collectively referred to as "the
Goldrush Group. The Goldrush Group is active in the provision
of
regulated gaming services/products, including electronic betting
terminals ("EBT's"), limited pay-out machines ("LPM's"),
sports betting online betting and casinos.
Proposed
transaction and
rationale
[
7]
In
terms of
the
proposed
transaction the Acquiring Firm
i
ntends
to acquire
1
4
.
77%
of the
i
ssued
capital
i
n
Goldrush
.
Post-merger
Zico Capital will control Goldrush.
I
m
pact
on competition
[8]
At the time the merging parties submitted this merger to the
Competition Commission
(the
Commission),
Zungu
I
nvestment
Company Proprietary Limited
(Zungu) held 76.2% of the
issued share capital
in Crazy Slots
Proprietary
Limited ("Crazy
Slots")
,
which
,
owns
and operates LPMs in Gauteng in competition with
Goldrush
.
[9]
Zico Capital and Crazy Slots respectively introduced a possible
horizontal overlap in the activities of the merging parties.
[
1
0]
The Commission subsequently
received
notice of a small merger according to
which Goldrush acquired
100%
of the issued share capital in Crazy Slots. The Commission
approved
the
small
merger. This means that the
proposed
merger no longer
results in a horizontal
or vertical overlap
in the
activities of the merging parties
.
[1
1
]
I
n
l
i
ght
of the above, the Commission
i
s
of the view that the proposed transaction is unlikely
to
substantially prevent
or
l
essen
competition within
the
relevant
market.
[12]
We agree with the Commission's conclusion
.
Public
I
nterest
[13]
The merging parties confirmed that the proposed transaction will have
no negative effect on employment.
[14]
The proposed transaction further raises no other public
i
nterest
concerns.
Conclusion
[
1
5]
I
n
light
of
the
above,
we conclude
that
the
proposed
transaction
I
s
un
l
ikely
to
substantially
prevent
or
l
essen
competition
i
n
any
re
l
evant
market.
I
n
addition, no
pu
b
lic
i
nterest
i
ssues
arise from the
p
roposed
transaction. Accordi
n
gly,
we approve
the
proposed transact
i
on
unconditionally.
20
SEPTEMBER 20
1
6
DATE
__________________________
Ms.
Medi Mokuena
Mr
Anton Roskam and Ms
Andiswa Ndoni
concurring
Tribunal
Researcher:
Busisiwe Masina
For
the merging parties:
Chris Charter of Cliffe Dekker Hofmeyr Inc.
For
the Commission:
Reabetswe Molotsi
[1]
Go
l
drus
h
is
not
co
n
tro
ll
ed
b
y
a
ny
firm o
r
share
h
o
l
der.