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[2016] ZACT 98
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JMR Holdings (Pty) Ltd v Transaction Capital Limited (LM104Sep16) [2016] ZACT 98 (14 November 2016)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No:
LM104Sep16
In
the matter between:
JMR
H
OLD
I
NGS
(PTY)
LTD
Acquiring
F
i
rm
And
TRANSACTION
CAPITAL
LIMITED
Target Firm
Panel
: Mondo Mazwai (Presiding Member)
: Yasmin Carrim
(Tribunal Member)
: lmraan Valodia
(Tribunal Member)
Heard
on
:
1
2
October
2016
Order
Issued on
: 12 October 2016
Reasons
Issued on
: 14 November 2016
Reasons
for Decision
APPROVAL
[1]
On 12
October
2016, the
Competition
Tribunal
approved a
l
arge
merger between
JMR
Ho
l
dings
(Pty)
Ltd
(
"
JMRH")
and
Transaction
Capital
Lim
i
ted
(“TCL
"
)
.
[2]
The reasons for the approval follow
.
PARTIES
TO THE TRANSACTION AND THEIR ACTIVITIES
Primary
Acquiring Firm
[3]
The primary acquiring firm is JMRH
,
a
company
incorporated
in accordance
with
the
l
aws
of
So
u
th
Africa which
,
p
r
e
-
me
r
ge
r,
is
a
dormant
firm
that
does not
control
any
other
firm.
JMRH
has
three
s
h
areholders,
the
Kimberly
I
nvestment
Trust ("K
l
T),
the Rutla
n
d
Trust ("RT") and
the
Sugar
Tube
Trust
("STT
"
)
wh
i
ch
shall
be
collectively
referred
to
as
"the
JMR
trusts".
Primary
Target Firms
[4]
TCL
i
s
a
company
i
ncorporated
i
n
accordance with
the Jaws of
the Republic
of So
u
th
Africa and wh
i
ch
is not controlled by any fir
m
.
KIT, RT and STT each possess a
shareho
l
di
n
g
of 1
4
.
3
8%
i
n
TCL. The remai
n
i
ng
major shareholders are
O
l
d
M
u
tual
L
i
fe
Assu
r
ance
Co. L
i
m
i
ted,
p
ossessing
a
1
0.2%
share
and
Allan Gray
(Pty)
Ltd
possessing
a 10
.
1%
share.
[5]
TCL controls
a
number
of
firms
and subsidiar
i
es
which,
collectively as
the
TCL
group are primarily concerned with the provision of specialised
financial and
allied
services
i
n
the
South
African
Financial
Sector.
[1]
PROPOSED
TRANSACTION AND RATIONALE
[6]
I
n terms
of
an
exchange
agreement
between
the
merging
parties,
JMRH
i
ntends
to acqu
i
re
43.48% of the share
i
ssue
capital of TCL
i
n
an asset-for share exchange
.
Th
i
s
constitutes the
1
4.38%
sharehold
i
ng
he
l
d
by
each
of
the
members
of
the
JMR
trust as
well
as an additional
0.33%
acquired
from
other
shareholders
of
TCL.
The
merger
is
i
n
essence
an
i
nternal
restructuring whereby the members of
the
JMR
trusts will use
JMRH
to
i
n
directly
hold
their
current
sharehold
i
ng
(w
i
th
an add
i
t
i
onal
0.33%)
i
n
TCL.
[7]
In
terms
of
r
ationale
,
the
merging
parties
submit
that
the
transaction
will faci
l
i
tate
conti
n
ued
co
n
fidence
in and effective
conti
n
u
i
ty
and co
n
trol
by the fou
n
ders
of
TCL
(namely
Jonathan
Jawno,
M
i
chael
M
endelow
i
ts
and Roberto Rossi)
over
the TCL group
.
COMPETITION
ANALYSIS
[8]
JMRH
i
s
a dormant firm
and
does
not
provide any
p
r
oducts
and/ or services. The TCL
group
provides
special
i
sed
financial
an
allied
services
i
n
the
South
African services
sector.
The Commission
i
nvestigated
the proposed
transaction
and concluded that
the
merger presents an overlap
only
insofar
as
the acqu
i
ring
firm has a pre-merger 43.
1
4%
sharehold
i
ng
i
n the
target firm.
[9]
The
Commis
s
i
on
concl
u
ded
that
the
transaction
i
s
unlikely
to
change
the
structure
of
any market
as
there
i
s
no
accretion
i
n
market
share
i
n
any
market.
We find
n
o
reason to
d
i
ffer
from the Commission's
findi
n
gs
that the p
r
oposed
merger
i
s
u
nl
i
kely
to
substantially prevent or
l
essen
competition
i
n
any
market
i
n
So
u
th
Africa.
CONCLUSION
[10]
The merger will have no negative effect
on
employment
and
does
not raise any
further
pu
b
l
i
c
i
nterest
concerns. Additionally the
m
erger
does not substantially prevent or
l
essen
competition
i
n
any
market.
We
therefore approved the
merger without
conditions.
1
4
November
2016
Date
___________________
Mondo
Mazwai
Yasmin
Carrim and Prof. lmraan Valodia concurring
Tribunal
Researcher:
Alistair
Dey-Van
Heerden
F
or
the
M
ergi
n
g
Parties: R
i
chardt
van Ransburg of ENSAfrica
F
or
the Commission:
Zi
n
tle Siyo
[1]
TCP
controls
the
follow
i
ng
Firms
:
SA
Taxi
F
i
nance
Ho
l
dings
(Pty)
Ltd
(which,
i
n
turn
controls
a
number
of
subsidiaries),
MBD
Cred
i
t
Solutions
Ho
l
dings
(Pty)
Ltd
(which
,
in
turn
controls
a
number
of
subsidiaries)
,
TC
Corporate Support (Pty) Ltd, TC Treasury (Pty) Ltd,
N
i
sela
I
nvestments,
Bayport
Financial
services
(Pty)
Ltd,
TC
Executive Holdings (Pty) Ltd
,
Transaction
Capital Business Partners (Pty) Ltd
,
Red
Sky Finance (Pty) L
t
d
.