competltion tribunal .... ,,, .,,,,. ..
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: LM118Sep16
In the matter between:
Main Street 1463 Proprietary Limited Primary Acquiring Firm
and
Acorp Gifts Proprietary Limited Primary Target Firm
Panel
Heard on
Order Issued on
Reasons Issued on
Approval
: Mondo Mazwai (Presiding Member)
: Medi Mokuena (Tribunal Member)
: lmraan Valodia (Tribunal Member)
: 26 October 2016
: 26 October 2016
: 23 November 2016
Reasons for Decision
[ 1 ] On 26 October 2016, the Competition Tribunal ("Tribunal") unconditionally approved
a merger between Main Street 1463 Proprietary Limited ("Main Street") and Acorp
Gifts Proprietary Limited ("Acorp").
[ 2] The reasons for approving the proposed transaction follow.
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Parties to transaction
Primary acquiring firm
[ 3] The primary acquiring firm, Main Street is controlled by Carlyle Sub-Saharan African
Fund Limited ("CSSAF"). CSSAF is a special purpose company established by private
equity investment funds managed by affiliates of the Carlyle Group. The primary
acquiring firm and its controllers and firms it controls in South Africa will hereafter be
referred to as the Acquiring Group .
[ 4 ] The Acquiring Group is an asset manager which manages funds that invests globally
in corporate private equity, real assets and fund solutions, amongst others. Main
Street itself is newly incorporated for purposes of this transaction and does not
conduct any business activities.
Primary target firm
[ 5 ] The primary target firm, Acorp is jointly controlled by four companies which ultimately
results in the firm being controlled by Amit Brill, Nimrod Barlev and Craig Friedman
and the David Brouze Trust.
[ 6 ] Acorp is a wholesale supplier of various branded promotional products such as iPad
and tablet holders, umbrellas and lanyards which it then on-sells to distributors and
re-sellers who would on-sell the products to customers in the corporate sector.
Proposed transaction and rationale
[ 7 ] The proposed transaction involves Main Street acquiring control over Acorp through
the acquisition of 70.1 % of the issued share capital. The remaining issued share
capital will be retained by three of the four previous shareholders Amit Brill, Nimrod
Barlev and Craig Friedman.
[ 8 ] The Acquiring Group submits that the proposed transaction is an attractive investment
opportunity for it. The primary target firm finds that the proposed transaction would
allow it to dilute a portion of its equity while simultaneously allowing one of its
shareholders to exit the business.
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Impact on competition
[ 9] According to the Competition Commission's ("the Commission") findings the proposed
transaction does not result in a substantial prevention or lessening of competition in
any market. This is because the Commission found that there was no overlap present
between the target and Acquiring Group as the target firm is involved in the wholesale
of branded promotional products whereas the Acquiring Group manages investment
funds.
[ 10 ] At the hearing we required clarification on the potential overlap between the Acquiring
Groups interest in Yakjin Trading Corp ("Yakjin") which is an apparel manufacturer
and Acorp which wholesales apparel. The merging parties submitted that Yakjin
manufactures branded clothing as opposed to Acorp which supplies unbranded
products for the purposes of branding them with corporate logos for corporate
advertising. Moreover, the merging parties submitted that there were a number of
clothing suppliers such as Edcon and the Foschini Group which would constrain the
merged firm post-merger. 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
[ 11 ] 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
[ 12] 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.
23 November 2016
DATE
Ms Medi Mokuena and Prof lmraan Valodia concurring
1 Inter alia merger record page 11.
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Tribunal Researcher:
For the merging parties:
For the Commission:
Aneesa Ravat
Richardt van Rensburg of EnsAfrica and Shawn van der
Meulen of Webberwentzel
Boitumelo Makgabo and Xolela Nokele
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