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[2019] ZACT 7
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African Equity Empowerment Investment Limited v SAAB Grintek Technologies (Pty) Ltd (LM233Jan19) [2019] ZACT 7 (18 February 2019)
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case
No: LM233Jan19
In
the matter between
African
Equity Empowerment Investment Limited
Primary Acquiring Firm
And
SAAB Grintek Technologies (Pty) Ltd
Primary Target Firm
Panel
: Y Carrim (Presiding Member)
:
M Mazwai
(Tribunal Member)
: I Valodia (Tribunal Member)
Heard
on
: 6 February 2019
Order
Issued on : 6
February 2019
Reasons Issued on
: 18 February 2019
REASONS
FOR DECISION
Approval
[1]
On
6 February 2019, the Tribunal unconditionally approved the proposed
transaction in terms of which African Equity Empowerment
Investment
Ltd ("AEEI") is acquiring control over SAAB Grintek
Technologies (Pty) Ltd ("SGT").
[2]
The
reasons for the approval of the proposed transaction follow.
Parties
to the transaction
[3]
The
acquiring firm, AEEI is a black-owned investment holding company
listed on the Johannesburg Stock Exchange. AEEI is controlled
by
Sekunjalo Investments Holdings (Pty} Ltd (Sekunjalo). Sekunjalo is
ultimately controlled by Dr Iqbal Surve. AEEI, its controllers
and
the firms it controls will collectively be referred to as the
acquiring group.
[4]
AEEI
has investments in a variety of sectors,
inter
alia,
media, events and tourism,
health and beauty, and technology.
[5]
The
target firm, SGT is controlled by SAAB South Africa (Pty} Ltd (SAAB
SA).
[6]
SGT
is a turnkey solutions integrator specialising in the design, supply,
deployment, comm1ss1onmg and maintenance of multi-technology
telecommunications system for mobile broadband and converged
solutions. SGT's activities can be broadly segmented into three core
areas: (i) Radio transmission; (ii) Power technologies; and (iii)
Customer solutions.
Proposed
transaction
[7]
AEEI
intends to acquire the entire issued share capital of SGT from SAAB
SA. Post-merger, AEEI will exercise sole control over SGT.
Relevant
market and impact on competition
[8]
The Competition Commission ("Commission") found that the
proposed transaction
does not give rise to horizontal overlaps
because the acquiring group does not hold any interests in entities
that provide the
same products/services provided by SGT. Therefore,
the proposed transaction is unlikely to change the structure of any
relevant
market as there is no accretion in the market share.
Further, the Commission found that the proposed transaction would not
result
in any vertical overlaps as there is no pre-existing business
relationship between the merging parties.
[9]
In light of the above, the Commission is of the view that the
proposed transaction
is unlikely to substantially prevent or lessen
competition in any relevant market.
Public
interest
[10] The proposed
transaction does not raise any public interest concerns.
Conclusion
[11] In light of the
above, we concluded 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 approved the proposed transaction
unconditionally.
Ms
Yasmin Carrim
Ms
Mondo Mazwai and Prof. lmraan Valodia concurring.
18 February 2019
Date
Tribunal
Case Manager
: Kgothatso
Kgobe
For
the Merging Parties
: B Phillips
and R Wilson of Webber Wentzel
For the Commission
: Y Okharedia and W Gumbie