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[2019] ZACT 65
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Matador Bidco S.A.R.L v Compania Espanola De Petroleos, S.A.U. (LM066Jul19) [2019] ZACT 65 (28 August 2019)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case No: LM066Jul19
In
the matter between
Matador
Bidco S.A.R.L
Primary Acquiring Firm
and
Compania
Espanola De Petroleos, S.A.U.
Primary Target Firm
Panel
: Enver Daniels (Presiding Member)
: Yasmin Carrim (Tribunal Member)
: lmraan Valodia (Tribunal Member)
Heard
on
: 31 July 2019
Order
Issued on
: 31 July 2019
Reasons
Issued on : 28 August 2019
REASONS
FOR DECISION
Approval
[1]
On 31 July 2019, the Tribunal
unconditionally approved a transaction in terms of which Matador
Bidco S.A.R.L ("Matador")
acquired joint control of
Compania Espanola De Petroleos, S.A.U. ("CEPSA").
[2]
The reasons for the approval follow.
Parties to the transaction
Primary Acquiring Firm
[3]
Matador
is a newly established private company incorporated in accordance
with the laws of Luxembourg. Matador is indirectly controlled
by
Carlyle International Energy Partners I, Carlyle International Energy
Partners II, Carlyle Europe Partners V, Carlyle and Carlyle
and
Carlyle Partners VII. Each of the firms that indirectly control
Matador are managed by affiliates of the Carlyle Group LP
("Carlyle"). Carlyle is a publicly traded limited
partnership listed on the NASDAQ stock exchange. Matador does not
control
any firm in South Africa or elsewhere in the world. Hoever
the Carlyle Group controls numerous firms in South Africa.
[1]
[4]
The
Carlyle Group invests in numerous industries including
transportation, consumer and retail, financial services, energy and
power, real estate, infrastructure and healthcare.
Primary Target Firm
[5]
CEPSA is a company incorporated in
accordance with the laws of Spain. CEPSA has business operations in
more than 20 countries worldwide
and focuses on the exploration,
production, refinement, distribution and marketing of petrochemicals.
CEPSA controls several entities
including Neotec Capital Riesgo
Sociedad De Fondos S.A, CEPSA Finance SAU, Petrocan SA, CEPSA Trading
SAU and Tamaca Autocentro
SA. CEPSA's South African activities are
limited to the supply of crude oil and petrochemical products.
[2]
Proposed transaction and
rationale
[6]
The
proposed merger is an international transaction notified to the
Competition Commission ("Commission") by virtue of
the
merging parties' activities in South Africa. Apart from South Africa,
the proposed merger has been notified in the following
jurisdictions:
Brazil, Chile, China, Colombia, Europe, Morocco, South Korea,
Switzerland and Turkey.
[7]
In
terms of the transaction, Matador will purchase between 30 and 40% of
the issued share capital in CEPSA from Mubadala Investment
Company
PJSC ("Mubadala"). Upon finalisation, Matador will exercise
joint control over CEPSA together with Mubadala.
[8]
Regarding
rationale, Matador submitted that it intends to support the growth
and development of CEPSA as a financial (as opposed
to strategic)
investor. CEPSA submitted that the transaction will create a
partnership with an experienced investor that will allow
Mubadala to
further grow CEPSA's business.
Relevant market and impact on
competition
[9]
The
Commission considered the activities of the merging parties in South
Africa and found that the proposed transaction does not
result in any
horizontal overlap because the Acquiring Firm does not conduct any
oil, gas or petrochemical activities in competition
with the Target
Firm in South Africa. Further, the Commission found that there is no
vertical overlap between the merging parties'
activities as they do
not participate at different levels of the same supply chain.
Public interest
[10] The
merging parties submitted that no job losses including retrenchments
and redundancies will occur
as a result of the proposed transaction.
The merging parties further submit that CEPSA currently has no
physical presence in South
Africa, and accordingly does not have any
employees in South Africa. There are no trade unions representing the
employees of Matador.
However their employee representative, Mr Nick
Reid, did not raise any concerns regarding the proposed
transaction.
[3]
Conclusion
[11] In
light of the above, we concluded that the transaction is unlikely to
substantially prevent or lessen
competition in any relevant market.
In addition, no adverse public interest issues arise from the
transaction. Accordingly, we
unconditionally approved the
transaction.
Mr.
Enver Daniels
Ms.
Yasmin Carrim and Prof. lmraan Valodia concurring.
28 August 2019
Date
Tribunal
Case Manager
: Andiswa Nyathi
For
the Merging Parties
: Richardt van Rensburg
instructed
by Edward
Nathan Sonnenbergs.
For
the Commission
:
Wiri
Gumbie and Zanele Hadebe.
[1]
A list of South African subsidiaries may be found on page 8-10 of
the Commission's Recommendation.
[2]
Such as Linear Alkylbenzene ("LAB"), Linear Alkylbenzene
Sulphonic Acid ("LABSA") and solvents used in the
manufacture of detergents and cleaning products
[3]
Please see page 1209-1211 of the merger record.