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[2020] ZACT 92
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Volvo Financial Services Southern Africa (Pty) Ltd v Volvo Finance Debtors Book (LM162Mar20) [2020] ZACT 92 (31 March 2020)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: LM162Mar20
In
the matter between:
Volvo
Financial Services Southern Africa (Pty) Ltd
Primary Acquiring Firm
And
The
Volvo Finance Debtors Book, owned by Wesbank,
Primary Target Firm
A
division of FirstRand Bank Limited
Panel:
Enver Daniels (Presiding Member) lmraan Valodia (Tribunal Member)
Andreas Wessels (Tribunal Member)
Heard
on: 31 March 2020
Order
Issued on: 31 March 2020
Reasons
Issued on: 31 March 2020
Reasons
for Decision
Approval
[1]
On 31 March 2020, the Competition Tribunal ("Tribunal")
unconditionally approved the transaction
involving Volvo Financial
Services Southern Africa (Pty) Ltd and The Volvo Finance Debtors
Book, owned by Wesbank, a division of
FirstRand Bank Limited.
[2]
The reasons for approving the proposed transaction follow.
Parties
to the proposed transaction
Primary
acquiring firms
[3]
The primary acquiring firm is the Volvo Financial Services Southern
Africa (Pty) Ltd ("VFS"), a
company incorporated in terms
of the laws of the Republic of South Africa. VFS is a 100% controlled
by Volvo Group Southern Africa
(Pty) Ltd ("Volvo Group SA").
[4]
VFS provides financial services to customers who buy Volvo Group SA
products. VFS provides equipment financing,
which encompasses
construction, mining equipment and fleets of trucks used for
commercial purposes.
Primary
Target Firm
[5]
The Primary Target Firm is Volvo Finance Debtors Book owned by
Wesbank, a division of FirstRand Bank Limited
(Debtors Book/Target
Business).
[6]
The Target Business is a Debtors Book controlled and owned by
Wesbank. The Debtors Book includes information
on entities and
individuals that are currently being financed by Wesbank in relation
to Volvo equipment brand within mining, construction,
logistics,
marine and industrial sectors. Debtors Book excludes finance for
passenger motor vehicles for personal use.
Proposed
transaction and rationale
[7]
In terms of the proposed transaction, Wesbank agreed to sell the
Debtors Book, which includes information
on entities and individuals
that owe money to Wesbank. The acquisition also entails the rights
attached to the Debtors Book. Post-merger,
VFS will solely control
the Debtors Book.
[8]
The merging parties submitted that the proposed transaction arose
pursuant to an option in favour of VFS contained
in the joint
enterprise agreement concluded with Wesbank to acquire the Debtors
Book. The financing services provided to Volvo
Group customers, who
were financed by Wesbank, was always provided under the joint brand
of Wesbank, combined with VFS and UDTFS.
The merging parties
submitted that it, therefore, made business sense to acquire the
Debtors Book and to continue providing solutions
provided to Volvo
Group customers, financed by Wesbank, because that has always been
provided under the VFS and UDTFS brands.
Impact
on competition
[9]
The Commission considered the activities of the merging parties and
found that there is a horizontal overlap
in relation to the provision
of equipment financing as it relates to the Debtors Book provided by
VFS.
[10]
The Commission found that VFS as result of acquiring the Debtors Book
from Wesbank will have a market share of less than
1% in the
provision of equipment financing post-merger and that they will be
constrained by the likes of First Rand, Nedbank, ABSA
and Standard
Bank. The Commission also engaged with market participants such as
Nedbank, ABSA and Standard Bank who have indicated
that they do not
have any concerns with the proposed transaction.
[11]
Given the above, the Commission concluded that the proposed
transaction is unlikely to lead to any substantial prevention
or
lessening of competition in any relevant market in South Africa due
to low market share accretion.
[12]
We concur with the Commission's findings
Public
interest
[13]
The merging parties confirmed that the proposed transaction will have
no adverse effect on employment in South Africa
and raises no other
public interest concerns.
Conclusion
[14]
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.
Mr
Enver Daniels
Prof
lmraan Valodia and Mr Andreas Wessels concurring
DATE:
31 March 2020
Tribunal
Case Manager: Ms Busisiwe Masina
For
the merging parties: Ms Ahmore Burger-Smidt of
Werksmans Attorneys
For
the Commission: Mr Tumiso
Loate