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[2018] ZACT 15
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Premier Fishing SA (Pty) Ltd v Talhado Fishing Eterprises (Pty) Ltd (LM299Mar18) [2018] ZACT 15 (5 June 2018)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case No: LM299Mar18
In
the matter between:
Premier
Fishing SA (Pty)
Ltd
Acquiring Firm
And
Talhado
Fishing Enterprises (Pty) Ltd
Target Firm
Panel
Andreas Wessels (Presiding Member)
Enver Daniels (Tribunal Member)
Fiona Tregenna (Tribunal Member)
Order
issued on
9 May 2018
Reasons
issued on 5 June 2018
REASONS
FOR DECISION
Approval
[1]
On
9 May 2018, the Competition Tribunal ("Tribunal")
unconditionally approved the large merger involving Premier Fishing
SA (Pty) Ltd ("Premier Fishing") and Talhado Fishing
Enterprises (Pty) Ltd ("Talhado").
[2]
The
reasons for approving the proposed transaction follow.
Parties
to the transaction and their activities
Primary acquiring firm
[3]
The
primary acquiring firm is Premier Fishing which is ultimately
controlled by Dr Iqbal Surve. Premier Fishing controls Premfish
Seafoods (Pty} Ltd and Marine Growers (Pty) Ltd.
[4]
Premier
Fishing is predominantly involved in commercial fishing, fish
processing and marketing. Specifically relevant to the competition
assessment of this transaction are its operations in the harvesting,
processing and marketing of chokka squid.
Primary target firm
[5]
The
primary target firm is Talhado which is controlled by Scofish (Pty)
Ltd which is in turn controlled by the trustees for the
time being of
Standur Trust. Talhado is involved in the harvesting, processing and
marketing of squid.
Proposed transaction and rationale
[6]
In
terms of the proposed transaction Premier Fishing intends to acquire
50.31% of the issued shares in Talhado and in a second step
it will
acquire shares from the minority shareholders in certain firms
controlled by Talhado. The Competition Commission ("Commission")
submitted that the two-steps constitute a single indivisible
transaction.
[7]
Premier
Fishing submitted that the proposed transaction would assist it in
growing its business.
[8]
Talhado
submitted that the proposed transaction will increase its empowerment
credentials and efficiencies.
Relevant market and impact on competition
[9]
The
Commission identified a horizontal overlap between the activities of
the merging parties in the harvesting, processing and marketing
of
squid. The Commission did not delineate between harvesting,
processing and marketing since the bulk of the processing of squid
generally occurs on the shipping vessels.
[10] The Commission
calculated market shares using two methods. First, the Commission
utilized the "total
allowable effort" since that is the
metric used by the Department of Agriculture, Forestry and Fisheries
to regulate the sector.
Using this method, the merged entity would
have a national market share of less than 20% in the harvesting,
processing and marketing
of squid. The Commission also calculated
market shares using 2017 revenue figures and on this basis found the
merging parties'
combined national market share to be less than 25%
in the harvesting, processing and marketing of squid. According to
the Commission's
market investigation, other market participants
include Balobi, Pioneer, Komicx, Blue Seas, Irvin & Johnson and
Kaytrad. Based
on the above, the Commission concluded that the
proposed transaction is unlikely to substantially prevent or lessen
competition
in the identified relevant market.
[11]
We
concur with the Commission's finding that the proposed transaction is
unlikely to substantially prevent or lessen competition
in the
relevant market.
Public interest
[12]
The merging parties submitted, which was
confirmed by the Commission, that the proposed transaction will not
have any negative effect
on employment.
[1]
[13]
The proposed transaction further 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
Andreas Wessels
Mr
Enver Daniels and Prof Fiona Tregenna concurring
5 June 2018
Tribunal
Case Manager
:
Ms
Aneesa Ravat
For
the merging parties
:
Ms N
Mia of Cliffe Dekker Hofmeyr
For
the Commission
: Mr W
Gumbie
[1]
Record pages 6 and 50.