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COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: LM199Jan17
In the matter between:
PRECRETE HOLDINGS (PTY) LTD
and
PLATCHRO HOLDINGS (PTY) LTD
Panel
Heard on
Order Issued on
Reasons Issued on
Approval
: Yasmin Carrim (Presiding Member)
: Andiswa Ndoni (Tribunal Member)
: Medi Mokuena (Tribunal Member
: 29 March 2017
: 29 March 2017
: 19 April 2017
Reasons for Decision
Acquiring Firm
Target Firm
[1] On 29 March 2017, the Competition Tribunal ("Tribunal") approved the proposed
transaction between Precrete Holdings (Pty) Ltd ("Precrete") and Platchro
Holdings (Pty) Ltd ("Platchro").
[2] The reasons for approving the proposed transaction follow.
Parties to the Proposed Transaction
Primary Acquiring Firm
[3] The primary acquiring firm is Precrete, a private company incorporated in
accordance with the laws of the Republic of South Africa and is controlled by
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PSG Private Equity (Pty) Ltd ("PSG PE"). PSG PE is an investment holding
company.
[4] Precrete controls a number of firms including Precrete Mining (Pty) Ltd, Precrete
(Pty) Ltd and Precrete Services (Pty) Ltd amongst others.
Primary Target Firm
[5] The primary target firm is Platchro, a private company incorporated in
accordance with the laws of the Republic of South Africa and is jointly controlled
by the trustees of the S&C trust and the J&L trust.
[6] Platchro controls a number of firms including Platchro Mining Services (Pty) Ltd
and Platchro Rasimone (Pty) Ltd, amongst others.
Proposed Transaction and Rationale
[7] Precrete intends to acquire all the issued shares of and loan claims against
Platchro. Post-transaction, Precrete will have sole control over Platchro.
[8] Precrete submits that the proposed transaction represents an opportunity for it
to diversify its customer base.
[9] From Platchro's perspective the proposed transaction represents an opportunity
for the trustees to dispose of their shareholding.
Relevant Market and Impact on Competition
[1 OJ Precrete specialises in the manufacture and supply of pre-mix concrete
products as well as the application and installation of secondary support
solutions in mines, predominantly in the platinum mining sector.
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[11] Platchro also provides mining services to customers, predominantly in the
platinum mining sector. Platchro supplies secondary support services to one of
its clients in one location.
[12] The Commission accordingly found a horizontal overlap in the application and
installation of secondary support solutions. However, it found that the proposed
transaction is unlikely to substantially prevent or lessen competition in the
relevant market due to the fact that Platchro has only one customer in the
provision of secondary support solutions which customer accounts for less than
10% of its revenue. The market share accretion of the merged entity was
estimated to be less than 2%.1 Furthermore, post-transaction the merged entity
will continue to face significant competition constraints from a number of large
reputable firms such as Guncrete, Aveng Mining, and Murray and Roberts
[13] At the hearing the merging parties also pointed to the fact that the relevant
market is a tender market and that generally, when a tender comes up, the
playing fields become levelled with competitors possessing relatively even
strengths.2
[14] The Commission is therefore of the view that the proposed transaction is unlikely
to substantially prevent or lessen competition in any of the relevant markets. We
concur with this finding.
Public Interest
[15] The merging parties submit that the proposed transaction will not result in any
adverse effects on employment as no retrenchments or job losses are foreseen
to occur as a result of the merger. 3
[16] The Commission was of the view that the proposed transaction is unlikely to raise
concerns on any other public interest grounds.
1 This figure is based on estimates provided by competitors of the merging parties.
2 Page 3 of the Transcript.
3 Page 346 of the Merger Record.
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Conclusion
[17] 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.
Ms Yasmin Carrim
19 April 2017
DATE
Mrs Medi Mokuena and Ms Andiswa Ndoni
Tribunal Researcher:
For the merging parties:
For the Commission:
Hayley Lyle
Nazeera Mia of Cliffe Dekker Hofmeyer
Kholiswa Mnisi
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