competitiontribunal soun~ AFRICA
COMPETITION TRIBUNAL OF SOUTH AFRICA
In the matter between
Navitas Holdings (Pty) Ltd
And
Main Street 1606 (Pty) Ltd
Panel : Enver Daniels (Presiding Member)
: Yasmin Carrim (Tribunal Member)
: Andiswa Ndoni (Tribunal Member)
Heard on : 18 September 2019
Order Issued on : 18 September 2019
Reasons Issued on : 21 October 2019
REASONS FOR DECISION
Approval
Case No: LM072Jul19
Primary Acquiring Firm
Primary Target Firm
[1] On 18 September 2019, the Competition Tribunal ("Tribunal") unconditionally
approved the proposed transaction involving Navitas Holdings (Pty) Ltd ("Navitas")
and Main Street 1606 (Pty) Ltd ("BEE NewCo"), hereinafter collectively referred to
as the merging parties.
[2] The reasons for the approval of the proposed transaction follow.
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Parties to the transaction
Primary Acquiring Firm
[3] The primary acquiring firm is Navitas, a company incorporated in accordance with
the laws of the Republic of South Africa. The shares in Navitas are widely dispersed
and as such no single shareholder controls Navitas. Navitas controls a number of
firms including Kabi Solar (Pty) Ltd ("Kabi Solar").
[4] Navitas is an energy development and investment company. It also invests in
renewable energy projects aimed at the government's Renewable Energy
Independent Power Purchase Procurement Program (REIPPPP). In fact, Kabi Solar
has some 600 MW of utility-scale solar PV projects however, the projects are not
operational and those that are under development have yet to be selected as
Preferred Bidders under REIPPPP.
Primary Target Firm
[5] BEE NewCo is a newly established entity for purposes of the proposed transaction.
BEE NewCo was established by Stanlib Infrastructure Private Equity Fund 1
("Stanlib Fund"). Stanlib Fund is represented by Stanlib Infrastructure GP 1 (Pty) Ltd
in its capacity as the general partner of the Stanlib Infrastructure GP Partnership I.
Stanlib Fund is ultimately controlled by Standard Group Ltd.
[6] Stanlib Fund has investments in many firms. Of relevance to the proposed
transaction are its interests in three renewable energy power stations, hereinafter
collectively referred to as the 'Project Companies'.
[7] The Project Companies' sole mandate is to generate power for Eskom as per their
20-year Power Purchase Agreements.
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Proposed transaction
[8] In terms of the Settlement Agreement entered into between the merging parties,
Navitas will acquire 69% of the share capital holding in BEE NewCo. Post-me~ger,
Navitas will exercise joint control over BEE NewCo. Navitas seeks to acquire an
interest in the Project Companies hence, the proposed transaction will take place in
two stages. The first being the acquisition of ordinary shares in BEE Newco.
Secondly, BEE NewCo will acquire negative control in each of the Project
Companies.
Impact on competition
[9] The Competition Commission ("Commission") considered the activities of the
merging parties and found a horizontal overlap in the national market for the
production of electricity generated through solar panels. In its investigation, the
Commission found that the merged entity will have a combined post-merger market
share of less than 30% with an accretion of less than 10%.
[1 O] The Commission was of the view that the post-merger market share would unlikely
raise competition concerns as the market accretion is low and the merging parties
would be constrained by the existing agreements with Eskom from engaging in any
anti-competitive behaviour.
[11] Given the above, the Commission concluded that the proposed transaction is
unlikely to substantially prevent or lessen competition in any relevant market.
Public interest
[12] The merging parties submitted that the proposed transaction would not result in any
job losses. In the same vein, the Commission confirmed that the proposed
transaction does not raise any employment concerns or any other public interest
issues.
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Conclusion
[13] In light ofthe above, we conclude that the proposed transaction is unlikely to prevent
or lessen competition in any market. In addition, no other public interest concems
arise from the.· proposed transaction. Accordingly, we approve the proposed
transaction unconditionally;
Mr Enver Daniels
cl/ October 2019
Date
Ms Yasmin Carrim and Ms Andiswa Ndoni concurring.
Tribunal Researcher: Hlumelo Vazi
For the. merging parties: S van der Meulen of Webber Wentzel
For the Commission N Myoli and T Mahlangu
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