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COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: LM1340ct16
In the matter between:
EOH MTHOMBO (PTY} LIMITED Primary Acquiring Firm
and
MARS HOLDINGS PROPRIETARY LIMITED Primary Target Firm
Panel
Heard on
Order Issued on
Reasons Issued on
Approval
: Norman Manoim (Presiding Member)
: Medi Mokuena (Tribunal Member)
: Andreas Wessels (Tribunal Member)
: 30 November 2016
: 30 November 2016
: 15 December 2016
Reasons for Decision
[1] On 30 November 2016, the Competition Tribunal (''Tribunal") approved the proposed
transaction between EOH Mthombo (Ply) Limited and Mars Holdings (Ply) Ltd.
[2] The reasons for approving the proposed transaction follow.
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Parties to proposed transaction
Primary acquiring firm
[3] The primary acquiring firm is EOH Mthombo (Pty) Limited a wholly-owned subsidiary
of EOH Holdings Limited ("EOH Holdings") a company incorporated in South Africa 1.
[4] EOH Holdings and its subsidiaries will collectively be referred to as the "Acquiring
Group"
Primary target firm
[5] The primary target firm is Mars Holdings (Pty) Ltd ("Mars"), a company incorporated in
South Africa. Mars is controlled by Mark Chewins (56.25%), while Ametjie Rist owns
(43.75%).
[6] Mars and its subsidiaries will collectively be referred to as the "Target Group2".
Proposed transaction and rationale
[7] The Acquiring Group intends to acquire 100% of the issued share capital of the Target
Group. On completion of the transaction, the Acquiring Group will control the Target
Group.
[8] The Target Group submits that the proposed transaction will help it recoup its
investment through receipt of cash and shares in the Acquiring Group. The proposed
transaction will also provide the Target Group and its employees with better growth
opportunities as a result of access to the Acquiring Group's customer base and the
shared services and resources of a larger listed group.
Impact on competition
[9] The Acquiring Group is an investment and management company which provides
consulting, technology and outsourcing services. It engages in developing businesses
and IT strategies, supply and implementing solutions and managing enterprise-wide
business systems and processes for medium to a larger clients. The Acquiring Group
provides services and products in three major areas, namely, consulting, technology
(software and infrastructure) and outsourcing.
1 EOH Holdings is a company listed on the Johannesburg Securities Exchange ("JSE").
2 Mars wholly-owns Syntell (Pty) Ltd ("Syntell"), which in tum controls the following, Mikros Traffic
Monitoring (Pty) Ltd, Milaos Traffic Monitoring (KZN) (Pty) Ltd, Milaos System (Pty) Ltd, Syntell Southern
Cape (Pty) Ltd, Syntell System (Pty) Ltd, System Namibia (Pty) Ltd, Syntell Ghana (Pty) Ltd.
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[10] The Target Group is active in the provision of services and solutions used in traffic
regulation and enforcement. The Target Group operates through three business
divisions namely Road Safety, Traffic Management and Revenue Collections.
[11] The Commission considered the activities of the merging parties and found that both
parties are active in the broader information technology market. However, the
Acquiring Group is active in the provision of information technology services which
include: network solutions, hosting services, server support services, desktop support
services, telephone service and procurement services. Whereas the Target Group is
active in the provision of services and solutions used in traffic regulation and
enforcement and provides automated online interaction and revenue collection system
and prepaid vending system used by municipalities and utilities. Therefore the
Commission concluded that there was no overlap between the activities of the merging
parties and therefore that the proposed transaction is unlikely to substantially prevent
or lessen competition within the relevant market.
[12] We concur with the Commission's conclusion
Public interest
[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 interest concerns.
Conclusion
[15] 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 Medi Mokuena and Mr Andreas Wessels concurring
15 December 2016
DATE
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