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[2018] ZACT 18
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Main Street 1511 (Pty) Ltd v Roossenkal Foods Investment Holdings (Pty) Ltd (LM265Jan18) [2018] ZACT 18 (5 March 2018)
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: LM265Jan18
In
the matter between:
Main Street 1511 (Pty)
Ltd
Primary Acquiring Firm
And
Roossenekal Foods
Investment Holdings (Pty) Ltd
Primary Target Firm
Panel
: Andreas
Wessels (Presiding Member)
: Mondo Mazwai
(Tribunal Member)
: Andiswa Ndoni
(Tribunal Member)
Heard
on
: 21 February 2018
Order
Issued on : 21 February 2018
Reasons
Issued on : 5 March 2018
REASONS
FOR DECISION
Approval
[1]
On
21 February 2018, the Competition Tribunal (''Tribunal")
unconditionally approved the proposed transaction involving Main
Street 1511 (Pty) Ltd ("Bidco") and Roossenekal Foods
Investment Holdings (Pty) Ltd ("Roossenekal"), hereinafter
collectively referred to as the merging parties.
[2]
The
reasons for approval of the proposed transaction follow.
Parties
to the proposed transaction
Primary
Acquiring Firm
[3]
Bidco
is a newly established entity for purposes of the proposed
transaction. It currently conducts no business activities in South
Africa.
[4]
Bidco
is controlled, through various offshore holding companies, by private
equity investment funds that are ultimately controlled
by Abraaj
Holdings ("Abraaj"), a company incorporated in accordance
with the laws of the Cayman Islands. Abraaj and its
various
subsidiaries and investments funds are hereinafter collectively
referred to as the 'Abraaj Group'.
[5]
The
Abraaj Group directly and indirectly controls a number of entities
globally. In South Africa, the Abraaj Group manages private
equity
funds which control Libstar Holdings (Pty) Ltd ("Libstar'').
[6]
Libstar
is broadly active in the foods and services sector, namely the
manufacture and distribution of food, beverage and other
consumer
products.
Primary
Target Firm
[7]
Roossenekal
is controlled by the Elaine and Selwyn Schaffer Family Trust
("Schaffer Family Trust").
[8]
Roossenekal
controls Roossenekal Foods (Pty) Ltd ("Roossenekal Foods")
and Roossenekal Two (Pty) Ltd ("Roossenekal
Two").
[9]
Roossenekal,
through its subsidiaries, trades as a KFC franchisee. Roossenekal
Foods owns and operates 45 KFC stores and Roossenekal
Two owns and
operates 17 KFC stores. These KFC franchises are located in
Mpumalanga, Gauteng, the North West and Limpopo.
Proposed
transaction
[10] In terms of the
Sale of Shares and Claims Agreement,
Bidco will acquire 100%
of the issued capital in Roossenekal and would therefore control
Roossenekal post-merger.
Impact
on competition
[11]
The Competition Commission
("Commission") found no horizontal overlap between the
activities of the merging parties since
the Abraaj Group does not
have interests in any KFC or other fast food retail operations in
South Africa. The Commission therefore
concluded that proposed
transaction is unlikely to substantially prevent or lessen
competition in any relevant market. We agree
with the Commission's
conclusion.
Public interest
[12]
The merging parties confirmed that the
proposed transaction will not result in any retrenchments or job
losses.
[1]
[13]
The proposed transaction raises no other
public interest concerns.
Conclusion
[14]
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
Andrea Wessels
Ms
Mondo Mazwai and Ms Andiswa Ndoni concurring
5 March 2018
Tribunal
Researcher:
Hlumelo Vazi
For
the Merging Parties: S Van der Meulen of Webber
Wentzel and M Samba
of ENSafrica
For
the Commission:
I Mhlongo and Z Hadebe
[1]
Merger
Record, pages 10 and 206.