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COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: LM1310ct16
In the matter between:
WENDEL SE Primary Acquiring Firm
and
TSEBO HOLDINGS PROPRIETARY LIMITED Primary Target Firm
Panel
Heard on
Order Issued on
Reasons Issued on
Approval
: AW Wessels (Presiding Member)
: Mondo Mazwai (Tribunal Member)
: Andiswa Ndoni (Tribunal Member)·
: 09 November 2016
: 09 November 2016
: 05 December 2016
Reasons for Decision
[1] On 09 November 2016, the Competition Tribunal ("Tribunal") approved the proposed
transaction involving Wendel SE and Tsebo Holdings Proprietary Limited.
[2] The reasons for approving the proposed transaction follow.
Parties to proposed transaction
Primary acquiring firm
[3] The primary acquiring firm is Wendel SE ("Wendel"), a French investment company
listed on the Euronext Paris. Wendel has one core shareholder being Wendel
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Participations SE ("Wendel Participations") with the rest of Wendel's shareholding
widespread.
[4] Wendel controls a large number of firms globally. In relation to South Africa, Wendel
controls a number of companies with operations or sales in South Africa, inciuding
Stahl (incorporated in the Netherlands), Constantia Flexibles (incorporated in
Austria), Bureau Veritas (incorporated in France) and CSP Technologies
(incorporated in the USA). Stahl is active in the market for process chemicals for
leather products and performance coatings for flexible substrates such as textile,
paper, plastics and polymers. Constantia Flexibles produces flexible packaging
solutions and labels primarily for the food and pharmaceuticals industries. Bureau
Veritas provides compliance and certification and laboratory testing services. CSP
Technologies designs and manufactures patented packaging solutions for moisture
and/or oxygen-sensitive products.
Primary target firm
[5] The primary target firm is Tsebo Holdings Proprietary Limited ("Tsebo"), a private
company duly incorporated according to the company laws of the Republic of South
Africa. Tsebo's South African operations are housed in Tsebo Solutions Group (Pty)
Ltd.
(6] Tsebo is primarily involved in the business of providing facilities management
solutions, catering, cleaning and security. It is also involved in the business of
providing hygiene supplies and energy management solutions.
Proposed transaction
[7] Wendel intends to, through a South African shelf company, acquire sole control over
the business of Tsebo. Post-merger, Tsebo will be wholly owned by Wendel.
Impact on competition
[8] The Competition Commission ("Commission") considered the merging parties'
activities and found that there is no horizontal or vertical overlap in their activities.
The Commission therefore concluded that the proposed transaction is unlikely to
substantially prevent or lessen competition in any relevant market. We concur with
the Commission's conclusion.
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Public interest
[9] The merging parties in their merger filing confirmed that the proposed transaction will
not result in any adverse impact on employment.1
[10] However, during the Commission's investigation it received a Notice of Intention to
Participate from the National Union of Mineworkers ("NUM"). NUM represents some
of the employees of Bureau Veritas Inspectorate Laboratories (Ply) Ltd ("BVI"). NUM
claimed that the proposed transaction was going to result in job losses.
[11] The Commission upon further investigation however found that certain retrenchments
taking place at BVI were not related to the proposed merger but were rather linked to
BVI losing a key contract pre-merger. We note that the Commission further engaged
with NUM on this issue and that NUM ultimately elected to withdraw its Notice of
Intention to Participate.
[12] The proposed transaction further raises no other public interest concerns.
Conclusion
[13] 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
other public interest issues arise from the proposed transaction. Accordingly, we
approve the proposed transaction unconditionally.
Ms Mondo Mazwai and Ms Andiswa Ndoni
Tribunal Case Manager:
For the merging parties:
For the Commission:
Karissa Moothoo Padayachie
Derek Lotter of Bowman Gilfillan Inc
Ratshidaho Maphwanya
1 Merger Record inter alia pages 10 and 57.
05 December 2016
DATE
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