competition trtbunal
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COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: LM096Sep16
In the matter between:
Public Investment Corporation Limited
Business Venture Investments No 1963 (RF) (Pty) Ltd Primary Acquiring Firms
and
Sub-Sahara Industrial Holdings (Pty) Ltd Primary Target Firm
Panel
Heard on
Order Issued on
Reasons Issued on
Approval
: Norman Manoim (Presiding Member)
: Anton Roskam (Tribunal Member)
: Mondo Mazwai {Tribunal Member)
: 30 September 2016
: 30 September 2016
: 26 October 2016
Reasons for Decision
[ 1 ] On 30 September 2016, the Competition Tribunal ("Tribunal") unconditionally
approved the merger between the acquiring firms Public Investment Corporation
Limited ("PIC") and Business Venture Investments no 1963 ("Business Venture ")
and the target firm Sub-Saharan Industrial Holdings ("SSIH").
[ 2] The reasons for approving the proposed transaction follow.
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Parties to transaction
Primary acquiring firm
[ 3 ) The primary acquiring firms, PIC is the duly authorized representative of the
Government Employees Pension Fund rGEPF") and is controlled by the South
African Government. The primary acquiring firm, Business Venture is jointly controlled
by Banzi Trade and Invest 17 (Pty) Ltd ( MBanzi Trade") and PIC. Banzi Trade is in
turn controlled by the Protus Sokhela Trust
[ 4 ) PIC is an asset management firm which provides asset management services to its
clients. Its role is to invest funds on behalf of its clients In accordance with their
investment mandates. For the purposes of this transaction, PIC is acting on behalf of
the GEPF which is a juristic person responsible for the management and
administration of government employee pensions in South Africa. GEPF has an
interest in RTT Holdings which is a transport and logistics company. Business Venture
is a private company which has no assets or turnover. One of its shareholders, Banzi
Trade is a property investment company which owns commercial property.
Primary target firm
[ 5] The primary target firm, SSIH is a holding company which has interests in
infrastructure related businesses primarily in the road and rail sectors which includes
the provision of transport and logistics as well as the supply and application of road
surfacing products.
Proposed transaction and rationale
[ 6) The proposed transaction involves PIC and Business Venture acquiring SSIH which
would result in the Protus Sokhela Trust and the PIC exercising joint control over SSIH
post- transaction.
[ 7 ) PIC submits that the proposed transaction represents an opportunity to facilitate the
transformation of an industry sub-sector which is critical to the growth and integration
of the South African region. Banzi Trade submits that the transaction is an opportunity
to invest in a leading infrastructure services company. SSJH submits that the proposed
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transaction is in order to upgrade its B-BBEE scores in order to become eligible for
government contracts.
Impact on competition
[ 8] According to the Competition Commission's ("the Commission") findings the proposed
transaction does not result in a substantial lessening of competition in any market.
This is based on the fact that the Commission found that there was no overlap present
between the target and acquiring firms. They note that the potential overlap arising
from GEPF's interest in RTT Holdings is not relevant to the proposed transaction as
RT offers courier services by road transportation which is distinct from SSIH which
offers logistics services to infrastructure related businesses.
[ 9] In the absence of any evidence to the contrary we concur with the Commission's
competition assessment, i.e. that the proposed transaction is unlikely to substantially
prevent or lessen competition as there is no overlap present.
Public interest
[ 10 ] The merging parties confirmed that the proposed transaction will not result in an
adverse impact on employment. 1 The proposed transaction further raises no other
public interest concerns.
Conclusion
[ 11 ] 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
n Manoim
Ms M do Mazwai and Mr Anton Roskam concurring
1 Inter a/ia merger record page 7.
26 October 2016
DATE
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Tribunal Researcher: Aneesa Ravat
For the merging parties: Albert Aukema of Cliffe Dekker Hofmeyr Inc
For the Commission: Zintle Siyo and Xolela Nokela
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