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[2018] ZACT 16
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C2 Computer Investments (Pty) Ltd v KMSA Holdings (Pty) Ltd (LM323Mar18) [2018] ZACT 16 (5 June 2018)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: LM323Mar18
In the matter between:
C2
COMPUTER INVESTMENTS (PTY)
LTD
Primary
Acquiring Firm
and
KMSA
HOLDINGS (PTY)
LTD
Primary Target
Firm
Panel
: AW Wessels (Presiding Member)
: Enver Daniels (Tribunal Member)
: Fiona Tregenna (Tribunal Member)
Heard
on
: 09 May 2018
Order
Issued on
: 09 May 2018
Reasons
Issued on
: 05 June 2018
Reasons
for Decision
Approval
[1] On
09 May 2018, the Competition Tribunal ("Tribunal")
unconditionally approved
the proposed transaction involving C2
Computer Investments (Pty) Ltd and KMSA Holdings (Pty) Ltd.
[2]
The reasons for approving the proposed
transaction follow.
Parties to the proposed
transaction
Primary acquiring firm
[3]
The
primary acquiring firm is C2 Computer Investments (Pty) Ltd ("C2"),
a private company incorporated in accordance with
the company laws of
South Africa. C2 is jointly controlled by Motus Corporation (Pty) Ltd
("Motus"), a wholly owned subsidiary
of Imperial Holdings
Limited, and Wooddale Investments (Pty) Ltd.
[4]
C2
is an investment holding company which controls firms that are active
in the provision of services and IT platforms to businesses
particularly within the motor industry. C2 conducts its operations
through its subsidiaries with their core services and IT platforms
being marketing, branding, micro dotting and an online sale platform
for vehicles.
[5]
The
Imperial Group operates in the logistics and vehicle sectors.
Primary target firm
[6]
The
primary target firm is KMSA Holdings (Pty) Ltd ("KMSA"), a
private company incorporated in accordance with the company
laws of
South Africa. Pre-merger KMSA is controlled by Motus.
[7]
KMSA
and its subsidiaries are active in
the importation and distribution of motorcycles, scooters and utility
vehicles.
Proposed
transaction and rationale
[8]
In
terms of the
Sale of Shares
Agreement,
C2 intends to acquire 93%
of the issued share capital of KMSA. In addition, C2 intends to,
through a wholly owned subsidiary, acquire
Erf 137 Eastgate Ext 3
("Erf Eastgate").
[1]
Post-transaction C2 will control KMSA and Erf Eastgate.
[9]
The
merging parties submitted that there is a mutual understanding
between KMSA and its current corporate owner, Matus, that KMSA
will
be best housed in C2 since C2 can provide the financial means and
market understanding to provide a stable and competent partner
via
which KMSA can continue its core business.
Impact on competition
[10] The
Competition Commission ("Commission") investigated the
activities of the merging parties
in South Africa and found no
horizontal product overlap between their activities. Given the above,
the Commission concluded that
the proposed transaction is unlikely to
substantially prevent or lessen competition in any relevant market in
South Africa. We
concur with this finding.
Public interest
[11]
The merging parties confirmed
that the proposed transaction will not give rise to any adverse
effect on employment.
[2]
[12]
Furthermore, the proposed
transaction raises no other public interest concerns.
Conclusion
[13]
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
Mr
Enver Daniels and Prof Fiona Tregenna concurring
05 June 2018
Tribunal Case Manager:
Busisiwe Masina
For
the merging parties:
Mr Rick van Ransburg
of Edward Nathan Sonnenbergs
Inc
For
the Commission:
Mr Tumiso Loate
[1]
Erf Eastgate
is a
commercial property.
[2]
Record pages 10 and 54.