competition trlbunal ••• ,, •f,1,.
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: LM192Jan17
In the matter between:
KAGISO CAPITAL (PTY) LTD Primary Acquiring Firm
and
KAGISO TISO HOLDINGS (PTY) LTD Primary Target Firm
Panel
Heard on
Order Issued on
Reasons Issued on
Approval
: Norman Manoim (Presiding Member)
: Enver Daniels {Tribunal Member)
: Andiswa Ndoni (Tribunal Member)
: 01 February 2017
: 01 February 2017
: 13 February 2017
Reasons for Decision
[1] On 01 February 2017, the Competition Tribunal ("Tribunal") approved the proposed
transaction between Kagiso Capital (Pty) Ltd and Kagiso Tiso Holdings (Pty) Ltd.
[2] The reasons for approving the proposed transaction follow.
Parties to proposed transaction
Primary acquiring firm
[3] The primary acquiring firm is Kagiso Capital (Pty) Ltd ("KC"), a company incorporated
in accordance with the laws of the Republic of South Africa.
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(4] KC is controlled by the Kagiso Charitable Trust ("KCr) and controls Kagiso Trust
Strategic Investments (Pty) Ltd ("KTSI"). KC has a 6.7% interest in KTH and KCT a
31 .3% interest in KTH.
[5] KCT empowers the poverty stricken by creating and implementing development
programs in the areas of education, capacity building, socio-economic development,
fundraising and investment through special projects.
Primary target firm
[6] The primary target firm is Kagiso Tiso Holdings (Pty) ltd ("KTH"), a company
incorporated in accordance with the laws of the Republic of South Africa.
[7] KTH is not controlled by any firm but does control the following: Kagiso Media (Pty)
ltd, Lupo Bakery (Ply) Ltd, Kagiso Asset Management (Pty) Ltd, Servest Group (Pty)
Ltd, and Kagiso Ventures (Pty) Ltd.
[8] KTH is a black controlled and managed investment holding company and has a
portfolio of investments across key sectors such as media, property, resources,
infrastructure, power, financial services, investment companies and health.
Proposed transaction
[9] In terms of the proposed transaction, KC intends to increase its shareholding in KTH
from 38% to 59% by acquiring an additional 21.3% shareholding held by Tiso Blackstar
Group SE. Upon the implementation of the transaction, KC will control KTH.
Rationale
Primary acquiring firm
[1 O] KTH is perceived to be a growth platform with attractive assets and the ability to raise
capital. Thus, the transaction allows KTH to create significant value for KC as a black
investment company.
Primary target firm
[11) The seller noted its intention to focus on media and related industries. This shift in
focus meant that the seller will dispose of all non-core assets which included KTH in
the short to medium term.
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Impact on competition
[12] The Commission considered the activities of the merging parties and found that there
was no overlap in the activities of the merging parties. The transaction does not change
the structure of any market as there will be no accretion in market shares.
[13] The Commission was therefore of the view that the proposed transaction is unlikely to
substantially prevent or lessen competition in any market.
Public interest
[14] The merging parties submitted that the proposed transaction will have no adverse
effect on employment.1
[15] The Commission was of the view that the proposed transaction is unlikely to raise
concerns on any other public interest grounds.
Conclusion
[16] In light of the above, we conclude that the proposed transaction is unlikely to
substantially prevent or lessen competition in any relevant market. Accordingly, we
approve the proposed transaction unconditionally.
Mr
Mr nver Daniels and Ms Andiswa Ndoni concurring
Case Manager: Kameel Pancham
13 February 2017
DATE
For the merging parties: Chris Charter of Cliffe Dekker Hofmeyr Inc.
For the Commission: Zintle Siyo
1 Inter alia Commiss ion's Recommend ation page 11.
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