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[2018] ZACT 25
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OMPE GP IV (Pty) Ltd and Another v Medhold Group (Pty) Ltd (LM023Apr18) [2018] ZACT 25 (7 June 2018)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case No: LM023Apr18
In
the matter between:
OMPE
GP IV (Pty)
Ltd
Primary Acquiring Firms
The
B Shareholders
And
Medhold
Group (Pty)
Ltd
Primary Target Firm
Panel
: Mr Andreas Wessels (Presiding Member)
: Ms
Andiswa Ndoni (Tribunal Member)
:
Prof Fiona Tregenna (Tribunal Member)
Heard
on
: 23 May 2018 Order
Issued
on
: 23 May 2018 Reasons
Issued
on
: 7 June 2018
REASONS FOR
DECISION
Approval
[1]
On
23 May 2018, the Competition Tribunal ("Tribunal")
unconditionally approved the proposed transaction involving OMPE
GP
IV (Pty) Ltd ("OMPE"), "The B Shareholders" and
Medhold Group (Pty) Ltd ("BidCo").
[2]
The
reasons for approving the proposed transaction follow.
Parties
to the proposed transaction and their activities
Primary
acquiring firms
[3]
The
primary acquiring firms are OMPE and "The 8 Shareholders".
The B Shareholders constitute of a company, trusts and
individuals
that are current shareholders in the business of Medsearch
Industries (Pty) Ltd ("MSI") and its subsidiaries
("MSI
Group").
[4]
OMPE
is ultimately controlled in South Africa by Old Mutual Group Holdings
(South Africa) (Pty) Ltd ("OMSA"), which is
in turn
ultimately owned and controlled by Old Mutual pie, a company listed
on the London and Johannesburg Stock Exchanges. OMSA
and all the
firms controlled by it are hereafter referred to as "OM Group".
[5]
OMSA
is an investment holding company active with investment portfolios in
various businesses such as asset management, life insurance;
banking
and investment services; and short-term insurance. OM Group
undertakes its investments through Old Mutual Investment Group
Holdings (Pty) Ltd ("OMIG"). The activities of OMIG's
portfolio are wide ranging and include activities such as the retail
sale of golf and cycling equipment, accessories and related products
and services; tourism services; the manufacturing and distribution
of
electro-mechanical equipment; and the manufacturing of recycled
ferrous and non-ferrous metal products as well as recycled paper,
cardboard and plastic products.
Primary
target firm
[6]
The
primary target firm is BidCo, a newly established vehicle
incorporated to facilitate the proposed transaction and specifically
to wholly own MSI Group.
[7]
MSI
owns 90.48% of the issued shares in Medhold Investments (Pty) Ltd,
which in turn owns 79.78% of the issued shares in Medhold
Medical
(Pty) Ltd.
[8]
MSI
Group is active in the sale of medical devices, servicing and
after-sales support. It also provides turn-key solutions to hospitals
and healthcare IT systems.
Proposed
transaction
[9]
The
proposed transaction takes place over several steps. Ultimately OMPE
intends to acquire 50% in the entire issued shares of BidCo
and The B
Shareholders will collectively hold the other 50% of all issued
shares in BidCo. Post-transaction, OMPE and The B Shareholders
will
exercise joint control over BidCo.
Impact
on competition
[1
0]
The Competition Commission
("Commission") investigated the activities of the merging
parties and found no horizontal overlap
between their activities or
vertical relationships between them. The Commission therefore
concluded that the proposed transaction
is unlikely to substantially
prevent or lessen competition in any relevant market. We concur with
the Commission's finding.
Public
interest
[11]
The merging parties confirmed
that the proposed transaction will have no negative effects on
employment.
[1]
[12]
The proposed transaction further
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
Andreas Wessels
Ms Andiswa Ndoni and Prof
Fiona Tregenna
7 June 2018
Tribunal
Case Manager: Jonathan Thomson
For the merging parties:
Nazeera Mia of Cliffe Dekker
For the Commission:
Hofmeyr Nonhlanhla Msiza
[1]
Pages 10 and 75 of the Record.