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[2018] ZACT 30
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Uniliver International Holdings N.V v Uniliver N.V and Uniliver PLC (LM043May18) [2018] ZACT 30 (26 July 2018)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: LM043May18
In
the matter between:
Unilever
International Holdings
N.V.
Primary
Acquiring Firm
And
Unilever
N.V. and Unilever
PLC
Primary Target
Firms
Panel
: AW Wessels (Presiding Member)
:
E Daniels (Tribunal Member)
:
Prof F Tregenna (Tribunal Member)
Heard
on
: 04 July 2018
Order
Issued on
: 04 July 2018
Reasons
Issued on
: 26 July 2018
REASONS
FOR DECISION
APPROVAL
[1]
On
04 July 2018, the Competition Tribunal ("Tribunal")
unconditionally approved the proposed transaction involving Unilever
International Holdings N.V. ("Unilever Holdings"), Unilever
N.V. and Unilever PLC, hereafter collectively referred to
as "the
merging parties".
[2]
The
reasons for approving the proposed transaction follow.
PARTIES
TO THE PROPOSED TRANSACTION
Primary
acquiring firm
[3]
The
primary acquiring firm is Unilever Holdings, a newly incorporated
Dutch entity for the purposes of the proposed transaction.
Upon
implementation of the proposed transaction, Unilever Holdings will be
the ultimate controlling entity of Unilever N.V. and
Unilever PLC and
will be listed on the Euronext, London and New York Stock Exchanges.
Primary
target firms
[4]
The
primary target firms are Unilever N.V. and Unilever PLC. Unilever
N.V. is listed on the Euronext Amsterdam Exchange and the
New York
Stock Exchange. Unilever PLC is listed on the London Stock Exchange
and the New York Stock Exchange.
[5]
In
South Africa, Unilever N.V. and Unilever PLC indirectly control
Unilever South Africa Holdings (Pty) Ltd ("Unilever SA
Holdings"), which in turn controls Unilever South Africa (Pty)
Ltd ("Unilever SA").
[6]
The
Unilever group is engaged in the manufacture and supply of a wide
range of products including food, beverage, cleaning agents
and
personal care products.
PROPOSED
TRANSACTION
[7]
In
terms of the proposed transaction, Unilever Holdings intends to
acquire Unilever N.V. and Unilever PLC. Post-merger, Unilever
Holdings will be the controlling entity of the Unilever group (along
with its subsidiaries), which includes Unilever SA Holdings
and
Unilever SA.
COMPETITION ANALYSIS
[8]
The Competition Commission ("Commission") found that the
proposed transaction
is an internal reorganisation of the Unilever
group and 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 in
this regard.
PUBLIC INTEREST
[9]
In their merger filing the merging parties submitted that it is not
anticipated that
the proposed transaction will have any negative
effect on employment. They specifically submitted that no
retrenchments are contemplated
as a result of the proposed
transaction.
[1]
[10]
However, during the Commission's investigation, the National Union of
Food Beverage Wine Spirits and
Allied Workers ("NUFBWSAW"),
raised certain labour related concerns which the union wanted the
Unilever group to resolve
prior to it supporting the proposed
transaction. These concerns related to various issues including
collective bargaining, pending
labour court cases, possible
retrenchments and a lack of consultation by the merging parties.
[11]
The Commission submitted that it
attempted to further engage NUFBWSAW in order to better understand
its concerns and in order to
determine if the concerns were merger
specific. The Commission said that it invited NUFBWSAW to a meeting
to discuss the issues,
but despite numerous telephonic and email
engagements, it received no further clarity.
[12]
The Commission furthermore
submitted that it engaged with the merging parties who had further
subsequent consultations with NUFBWSAW
in which it was reiterated
that the proposed transaction will not result in any job losses. The
merging parties provided written
confirmation to this effect to both
NUFBWSAW and the Commission.
I
n
addition, the Commission noted that the balance of the issues raised
by NUFBWSAW appear to be unrelated to the proposed merger
since they
relate to
inter alia
collective
agreements and pre-merger pending labour court cases. The Commission
further found that it was unlikely that the proposed
transaction
would raise employment concerns since the proposed transaction
essentially entails an internal reorganisation of the
Unilever group
at a shareholder level and not at an operational level.
[13]
The Tribunal invited NUFBWSAW to
attend the hearing and make written or oral submissions, if it wished
to. NUFBWSAW however was
not present at the hearing and made no
further representations.
[14]
Responding
to questions from the Tribunal, the merging parties at the hearing
confirmed that they had a meeting with NUFBWSAW regarding
the union's
concerns. The merging parties emphasised that the proposed
transaction entails a reorganisation at group parent level
and that
it in fact will have no impact on the business operations of Unilever
in South Africa, including employees. The latter
was reduced to
writing and sent to the union and a similar letter was also sent to
the Commission.
[2]
[15] Given
the above, we have no reason to believe that the proposed transaction
raises employment concerns.
[16] The
proposed transaction furthermore raises no other public interest
issues.
CONCLUSION
[17]
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 employment concerns or any other
public interest issues arise
from the proposed transaction.
Accordingly, we approve the proposed transaction unconditionally.
Mr
AW Wessels
Mr
E Daniels and Prof. F Tregenna concurring
26 July 2018
Tribunal
Case Manager
: Ndumiso
Ndlovu
For
the Merging Parties
: L Naidu
and A Tzarevski of Baker McKenzie
For
the Commission
: I Mhlongo and A Mfuphi
[1]
Merger Record, pages 7 and 129.
[2]
Transcript, pages 8 and 9