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[2019] ZACT 2
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Agile Capital Holdings (Pty) Ltd v Provest Group (Pty) Ltd (LM2020ct18) [2019] ZACT 2 (29 January 2019)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: LM2020ct18
In
the matter between
Agile
Capital Holdings (Pty)
Ltd
Primary
Acquiring Firm
And
Provest
Group (Pty)
Ltd
Primary Target
Firm
Panel
: Norman Manoim (Presiding Member)
: Enver Daniels (Tribunal Member)
: Andiswa Ndoni (Tribunal Member)
Heard on
: 16 January 2019
Order Issued on
: 16 January 2019
Reasons Issued on
: 29 January 2019
REASONS
FOR DECISION
Approval
[1]
On
16 January 2019, the Competition Tribunal ("Tribunal")
unconditionally approved the proposed transaction involving
Agile
Capital Holdings (Pty) Ltd ("Agile Holdings") and Provest
Group (Pty) Ltd ("Provest"), hereinafter collectively
referred to as the merging parties.
[2]
The
reasons for the approval of the proposed transaction follow.
Primary
Acquiring Firm
[3]
The
primary acquiring firm is Agile Holdings. Agile Holdings controls two
firms, Zico Capital (Ply) Ltd ("Zico Capital")
and Zico
Capital 2 (Pty) Ltd ("Zico Capital 2"). Agile Holdings,
Zico Capital and Zico Capital 2 are hereinafter collectively
referred
to as the 'Agile Group'.
[4]
Agile
Holdings and its subsidiaries are investment holding companies,
active in the private equity sector. The Agile Group invests
in
various sectors including mining, security, fleet management,
personal care and beauty, and energy.
Primary
Target Firm
[5]
Provest
is controlled by PSG Alpha Investments (Ply) Ltd ("PSG Alpha")
with a 51% share capital holding. The Agile Group
holds 42% of the
issued share capital. The remaining share capital (7%) is dispersed
amongst three other firms.
[6]
The
activities of Provest are concentrated in the mining sector and more
specifically the provision of safety related products and
services.
Proves! operates through its four core divisions namely (i) cement
and aggregate products, (ii) general mining activities,
(iii)
underground and surface support, and (iv) innovative technology
solutions. Proves! has four production plants situated in
the
North-West, Limpopo, Mpumalanga and Northern Cape provinces. Provest
also has a workshop in Rustenburg.
Proposed
transaction and rationale
[7]
In
terms of the
Shareholders Agreement,
the Agile Group intends to increase
its shareholding in Provest from 42% to 51%. Post-merger, the Agile
Group will have
de jure
control
over Provest.
[8]
The
Competition Commission ("Commission") found that the
proposed transaction does not give rise to a horizontal overlap
as no
firm within the Agile Group (except for the Agile Group's
shareholding in Proves!) provides or has interests in businesses
that
provide cementitious products, general mining activities, underground
support and innovative technology solutions. The Commission
therefore
concluded that the proposed transaction is unlikely to substantially
prevent or lessen competition in any relevant market.
We agree with
the Commission's conclusion.
Public
interest
[9]
The
merging parties submitted that the proposed transaction will not
result in any retrenchments or job losses. The Agile Group
has no
employees. Proves! employees are represented by the following trade
unions namely, National Union of Mineworkers (NUM),
Association of
Mineworkers and Construction Union (AMCU), General Industries Workers
Union of SA (GIWUSA), Building Construction
& Allied Workers
Union (BCAWU), South African Equity Workers Association (SAEWA), and
National Transport Movement (NTM).
[10] None
of the trade unions confirmed receipt of the merger notice nor did
they respond to the Commission's
invitation to indicate whether or
not they had concerns with the proposed transaction. Although the
trade unions have not responded,
the Commission is of the view that
the proposed transaction is unlikely to raise employment concerns
given that no employees will
be retrenched.
[11]
The
proposed transaction raises no other public interest concerns.
[12]
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 concerns arise from
the proposed transaction. Accordingly, we approve the proposed
transaction unconditionally.
Mr
Norman Manoim
Mr
Enver Daniels and Ms Andiswa Ndoni concurring.
29
January 2019
Date
Tribunal
Researcher
: Hlumelo Vazi
For
the merging parties : N Loopoo of
Cliffe Dekker Hofmeyr
For
the Commission
:I Mhlongo and W Gumbi