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[2018] ZACT 49
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BOE Private Equity (Pty) Ltd and Another v Heritage Capital Fund (LM182Sep18) [2018] ZACT 49 (21 November 2018)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case No: LM182Sep18
In
the matter between:
BOE
Private Equity (Pty) Ltd
Heritage
Capital Fund
I
Acquiring Firms
and
General
Profiling (Pty)
Ltd
Target Firm
Panel
Enver Daniels (Presiding Member)
Mondo Mazwai (Tribunal Member)
Fiona Tregenna (Tribunal Member)
Order
issued on
24 October 2018
Reasons
issued on
21
November 2018
REASONS
FOR DECISION
Approval
[1]
On
24 October 2018, the Competition Tribunal ("Tribunal")
unconditionally approved the large merger involving the acquiring
firms, BoE Private Equity (Pty) Ltd ("BoE") and Heritage
Capital Fund I ("Heritage Capital") and the target
firm
General Profiling (Pty) Ltd ("General Profiling").
[2]
The
reasons for approving the proposed transaction follow.
Parties to the transaction and
their activities
Primary acquiring firm
[3]
The primary acquiring firms are
BoE and Heritage Capital. BoE is a wholly owned subsidiary of
Nedbank Ltd and is in turn controlled
by Old Mutual pie. Heritage
Capital is controlled by Heritage Capital GP.
[4]
BoE is an investment holding
company in respect of a variety of businesses ranging from asset
management to short-term insurance.
Heritage Capital is a 100 percent
black female owned investment group which has a single investment in
Aria Technologies Africa
(Pty) Ltd.
Primary
target firm
[5]
The
primary target firm is General Profiling (Pty) Ltd, a South African
incorporated company which is controlled by Mr. Gavin Poplak.
[6]
General
Profiling is involved in the steel industry and provides stainless
steel and aluminum services ranging from flame cutting
to rolling.
Proposed
transaction and rationale
[7]
In
terms of the proposed transaction BoE and Heritage Capital would
acquire 30 percent of the issued share capital in General Profiling
and will exercise joint control post-transaction.
[8]
BoE
has submitted that its rationale for the transaction is that the
acquisition is in line with its strategic objectives. Heritage
Capital submitted that the proposed transaction would allow it to
grow its portfolio. General Profiling submitted that the proposed
transaction would allow retiring shareholders to realize the value of
their shares.
Relevant market and impact on
competition
[9]
The
Commission identified no overlaps in the activities of the parties as
the acquiring firms do not provide any services provided
by General
Profiling. Accordingly, the Commission submitted that the proposed
transaction would not result in a substantial lessening
of
competition.
[10] We
concur with the Commission's finding that the proposed transaction is
unlikely to substantially
prevent or lessen competition as there is
no overlaps.
Public
interest
[11]
The merging parties submitted,
which was confirmed by the Commission, that the proposed transaction
will not have any negative effect
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 Enver Daniels
Ms
Mondo Mazwai and Prof Fiona Tregenna concurring
21 November 2018
Date
Tribunal
Case Manager
Ms Aneesa
Ravat
For the merging
parties
Mr
Albert Aukema of CDH
For
the Commission
Ms Rethabile Ncheche
[1]
Record pages 78.