competitlon trlbun al •• • ,. •/•1# 4
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: LM022Apr17
In the matter between:
BUSINESS VENTURE INVESTMENTS
NO 1953 (PTY) LTD
Primary Acquiring Firm
and
AFRIT GROUP (PTY) LTD
Panel
Heard on
Order Issued on
Reasons Issued on
Approval
Primary Target Firm
: AW Wessels (Presiding Member)
: Mondo Mazwai (Tribunal Member)
: lmraan Valodia (Tribunal Member)
: 14 June 2017
: 14 June 2017
29 June 2017
Reasons for Decision
[1] On 14 June 2017, the Competition Tribunal ('Tribunal") approved the proposed
transaction involving Business Venture Investments No 1953 (Pty) Ltd and Afrit
Group (Pty) Ltd.
[2] The reasons for approving the proposed transaction follow.
Parties to proposed transaction
Primary acquiring firm
[3] The primary acquiring firm is Business Venture Investments No 1953 (Pty) Ltd (to be
renamed Industrial Services Holdings) ("lnServe"), a recently formed private
company duly incorporated in accordance with the company laws of the Republic of
South Africa.
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[4] lnServe is a subsidiary of IEP Portfolio 1 (Pty) Ltd ("IEP"). IEP is controlled by
Investec Bank Limited.
[5] lnServe is the holding company for four operating entities: Uvundlu Investments
(Pty) Ltd, Concord Cranes (Pty) Ltd, Prowalco (Pty) Ltd and Uni-Span Holdings (Pty)
Ltd.
Primary target firm
[6] The primary target firm is Afrit Group (Ply) Ltd ("Afrit"), the holding company for the
Afrit group of companies ("the Afrit Group").
[7] Afrit is jointly controlled by Hulisani Consortium RF (Pty) Ltd ("Hulisani") which holds
51.02% of the issued share capital in Afrit and Van de Wetering lndustriee Holdings
(Pty) Ltd ("VDWH"), which holds 48.98% of the issued share capital in Afrit.
[8] We note that IEP has a 46.4% existing shareholding in Hulisani.1
Proposed transaction and rationale
[9] The proposed transaction entails the Afrit Group's shareholders swapping their
respective shares into lnServe through a series of interrelated transactional steps.
According to the Competition Commission ("Commission") the proposed transaction
ultimately results in Afrit and Afrit Propco (Pty) Ltd becoming subsidiaries of lnServe.
[1 O] The merging parties submitted that Afrit will be a good fit within the existing industrial
services group.
[11] The shareholders in Afrit submitted that they have agreed to merge into lnServe, with
the benefit of exposure to a more diversified holding company.
Impact on competition
[12] The Commission found no overlap between the activities of the merging parties. The
acquiring group is active in the supply of industrial equipment such as lifting
equipment, compact construction equipment, industrial cleaning products and
1 Merger Record , page 31.
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equipment, mobile cranes, scaffolding services and liquid fuel dispensing equipment.
Afrit manufactures and sells a wide range of standard and bespoke trailers for large
commercial vehicles. Afrit also provides short-term finance for trailer sales through
Phuma Finance and provides short- and long-term trailer rental solutions through
Phuma Rentals.
[13) Given the above, the Commission concluded that the proposed transaction is unlikely
to substantially prevent or lessen competition in any market in South Africa. We
concur with this finding.
Public interest
[14) In relation to employment the merging parties submitted that the target firm will
continue to operate as a separate entity post-merger and that the proposed
transaction will not result in post-merger employment overlaps or redundancies.2
[15) Furthermore, the proposed transaction raises no other public interest concerns.
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. In addition, no
public interest issues arise from the proposed transaction. Accordingly, we approve
the proposed transaction unconditionally.
Mr AW Wessels
29 June 2017
DATE
Ms Mondo Mazwai and Prof lmraan Valodia concurring
Tribunal Case Manager:
For the merging parties:
For the Commission:
2 Merger Record, page 8.
Busisiwe Masina
Mr Chris Charter of Cliffe Dekker Hofmeyr
Ms Lindiwe Khumalo
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