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[2019] ZACT 16
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SM Holdco (Pty) Ltd v SmartMatta (Pty) Ltd (LM246Jan19) [2019] ZACT 16 (25 March 2019)
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case
No: LM246Jan19
In
the matter between
SM
Holdco (Pty) Ltd
Primary Acquiring Firm
And
SmartMatta
(Pty) Ltd
Primary Target Firm
Panel
: Norman Manoim (Presiding Member)
: Enver Daniels (Tribunal Member)
: Mondo Mazwai (Tribunal Member)
Heard on
: 27
February 2019
Order Issued on
: 27 February 2019
Reasons Issued on
: 25 March 2019
REASONS
FOR DECISION
Approval
[1]
On
27 February 2019, the Competition Tribunal ("Tribunal")
unconditionally approved the proposed transaction in terms
of which
SM Holdco (Pty) Ltd ("SM Holdco") is acquiring control over
SMartMatta (Pty) Ltd ("SmartMatta").
[2]
The
reasons for the approval of the proposed transaction follow.
Parties
to the transaction
[3]
The
primary acquiring firm, SM Holdco is a new entity established
specifically for the proposed transaction, and as such does not
conduct any business activities. SM Holdco is jointly controlled by
Corvest 12 (Pty) Ltd (Corvest) and Anthill Mid Cap Fund I (Pty)
(Anthill). Anthill is jointly controlled by Corvest and Anthill
Capital Fund Manager (Pty) Ltd, a BEE private equity firm that
has
partnered with First Rand Ltd.
[1]
Apart from SM Holdco and Anthill, Corvest does not control any firm.
Corvest is ultimately controlled by First Rand. First Rand
and all
its subsidiaries, including SM Holdco, will be collectively referred
to as the acquiring group.
[4]
The
primary target firm is SmartMatta, which is wholly-owned by
SmartMatta Holdings (Pty) Ltd. SmartMatta Holdings is in turn
wholly-owned
by Barloworld Logistics Africa (Pty) Ltd, which is
ultimately controlled by Barloworld Ltd, a company listed on the
Johannesburg
Stock Exchange.
[5]
SmartMatta
provides on-site waste management solutions, off-site recycling
facilities, supply chain and logistics and advisory services
to a
diversified and blue-chip customer base. SmartMatta is active
throughout South Africa, except in the Northern Cape and North-West
provinces. SmartMatta also exports unprocessed recyclable waste from
time to time to various countries depending on demand.
Proposed
transaction
[6]
SM
Holdco intends to acquire the entire issued share capital in
SmartMatta. Post-merger, SM Holdco will solely control SmartMatta.
Relevant
market and impact on competition
[7]
The
Commission found that the proposed transaction does not result in a
horizontal overlap because the acquiring group is not active
in the
service based waste management and recycling business. Further,
the Commission found that the proposed transaction
does not raise any
vertical overlaps as there is no pre-existing business relationship
between SmartMatta and the acquiring group.
In view of the above, the
Commission concluded that the proposed transaction is unlikely to
substantially prevent or lessen competition
in any market. We find no
reason to disagree with the Commission.
Public
interest
[8]
The proposed transaction does not raise
any public interest concerns.
Conclusion
[9]
In
view 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.
Mr
Norman Manoim
Mr
Enver Daniels and Ms Mondo Mazwai concurring.
25
March 2019
Date
Tribunal
Case Manager
: Kgothatso
Kgobe
For
the Merging Parties
:
L Odendaal of Falcon & Hume
For
the Commission
: Z Siyo
[1]
See Transcript, Page 5.