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[2018] ZACT 19
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Mitsui & CO Ltd v ETC Group (Mauritius) Ltd (LM266Jan18) [2018] ZACT 19 (12 March 2018)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case No: LM266Jan18
In
the matter between:
Mitsui
& CO
Ltd
Primary Acquiring Firm
And
ETC
Group (Mauritius)
Ltd
Primary Target Firm
Panel
: Norman
Manoim (Presiding Member)
: Medi
Mokuena (Tribunal Member)
: Enver
Daniels (Tribunal Member)
Heard
on
:
16
February 2018
Order
Issued on :
16 February 2018
Reasons
Issued on :
12 March 2018
Reasons
for Decision
Approval
[1]
On 16 February 2018, the Competition Tribunal ("Tribunal")
unconditionally
approved the transaction involving Mitsui & CO
Ltd ("Mitsui") and ETC Group (Mauritius) Ltd ("ETC
Group").
The reasons for approving the proposed transaction
follow.
Parties
to the proposed transaction
Primary
acquiring firm
[2]
Mitsui
is a company incorporated and registered in accordance
with the laws of Japan, and is listed on the Tokyo Stock Exchange,
Nagoya
Stock Exchange, Sapparo Stock Exchange and the Fukuko Stock
Exchange. Mitsui is not controlled by any firm. Mitsui is a
conglomerate
involved in many sectors. Of relevance to the proposed
transaction, are Mitsui's activities as a grain trader. It must be
noted
that Mitsui has no grain processing facility nor any staff in
the country. The only presence Mitsui has had in the South African
agricultural sector, was in the previous financial year, when its
Uruguay subsidiary sold maize to a third party trader in Uruguay,
who
then brought it into South Africa.
Primary
target firm
[3]
ETC Group
is a private company incorporated in accordance with
the law of the Republic of Mauritius. ETC Group is controlled by ETC
Holdings
(Mauritius) Limited ("ETC Holdings"), Standard
Charter Private Equity (Mauritius) Ill Limited (SPC") and PRIF
Afrivest
Limited (PR"). ETC Group controls various firms
worldwide. In South Africa, ETC Group controls ETC Marine South
Africa (Pty)
Ltd and ETC Agro (Pty) Ltd. ETC Group is involved in
various agricultural trading and processing businesses in 27
countries in
Africa as well as North America, Europe, the Middle East
and South East Asian countries. ETC Group's commodities include
cashews,
seeds, sugar, coffee and wheat amongst others. In South
Africa, ETC Group only trades in maize but it does not have any maize
production
facilities.
Proposed transaction and rationale
[4]
The proposed transaction entails the merging of two trading
organizations, one which
has no presence in South Africa (Mitsui),
and another which has existing presence in South Africa (ETC Group).
Impact
on competition
[5]
The proposed transaction gives rise to a horizontal overlap in the
national market
for the wholesale of maize. The post-merger market
share is less than 5% with an accretion of less than 5%. The merged
entity will
continue to face competition from various firms such as
Seaboard Overseas Trading, Senwes and COFCO amongst others. The
Commission
therefore concluded that the proposed transaction is
unlikely to substantially prevent or lessen competition in any
relevant market
in South Africa. We concur with the Commission's
finding.
Public interest
[6]
The proposed transaction will not have any negative effect on
employment, nor raise
any other public interest concerns.
Conclusion
[7] I
light of the above, we approve the proposed transaction
unconditionally.
Mr
Norman Manoim
Mr
Enver Daniels and Ms Medi Mokuena concurring
12 March 2018
Tribunal
Case Manager :
Caroline Sserufusa
For
the merging parties :
Xolani Nyali
of Bowmans
For the Commission
:
Nonhlanhla Msiza