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COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: LM168Mar20
In the matter between
Synchronized Logistical Solutions (Pty) Ltd
t/a InSync Solutions
Primary Acquiring Firm
And
QPlas (Pty) Ltd Primary Target Firm
Panel : Mr E Daniels (Presiding Member)
: Mr. A Wessels (Tribunal Member)
: Prof. I Valodia (Tribunal Member)
Heard on : 31 March 2020
Order Issued on : 31 March 2020
Reasons Issued on : 30 April 2020
REASONS FOR DECISION
APPROVAL
[1] On 31 March 2020, the Competition Tribunal (“Tribunal”) unconditionally
approved a large merger between Synchronized Logistical Solutions (Pty) Ltd
t/a InSync Solutions and QPlas (Pty) Ltd.
[2] The reasons for the approval of the proposed transaction follow.
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PARTIES TO THE PROPOSED TRANSACTION
Primary acquiring firm
[3] The primary acquiring firm is Synchronized Logistical Solutions (Pty) Ltd t/a
InSync Solutions (“InSync”), a private company incorporated in accordance
with the laws of South Africa. InSync does not control any firms. InSync is jointly
controlled by Imperial Logistics South Africa Holdings (Pty) Ltd (“Imperial
Holdings”) (50.13%) and Rhidan Investments 94 (Pty) Ltd (“Rhidan”) (49.87%).
[4] Imperial Holdings is controlled by Imperial Logistics Ltd (“Imperial”), which is
not controlled by any firm. Imperial and all the firms it controls shall be referred
to as the “Imperial group”. InSync and the Imperial group are active in the
nation-wide provision of consumer and industrial logistics services including
road freight, transport, managed logistics warehousing, distribution and supply
chain integration.
[5] Rhidan is ultimately jointly controlled by the trustees of the R&R Trust (50%)
and the Cronje Trust (50%). The R&R Trust and the Cronje Trust and all of the
firms controlled by them shall be referred to as the “Rhidan Group”. 1 InSync,
the Rhidan group and the Imperial group shall be jointly referred to as the
“acquiring group”.
Primary target firm
[6] The primary target firm is QPlas (Pty) Ltd (“QPlas”), a private company
incorporated in accordance with the laws of South Africa. QPlas does not
control any firms in South Africa. QPlas is controlled by Mr Thomas du Toit
(52.5%).
[7] QPlas is involved in the manufacturing of plastic automotive parts for the
automotive industry such as exterior mirrors, as well as plastic injection
moulding and assembly for making plastic interior trim parts at its facility in
Uitenhage, Eastern Cape.
1 The Rhidan group’s main activities are to house the dividends paid to them by InSync.
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PROPOSED TRANSACTION AND RATIONALE
[8] InSync and Imperial intend to purchase all of QPlas’s shares from its existing
shareholders. InSync intends to acquire an 80% shareholding, and Imperial
intends to acquire the remaining 20% in QPlas. Post-merger, Imperial will
ultimately control QPlas.
[9] The transaction would facilitate the acquiring group’s diversification and
expansion in the automotive sector. For QPlas, the transaction would allow
respite from cashflow difficulties perpetuated by under-performing contracts.
RELEVANT MARKET AND IMPACT ON COMPETITION
[10] The Competition Commission (“Commission”) considered the activities of the
merging parties and found that the proposed transaction does not result in any
horizontal or vertical overlaps. This was because the acquiring group is not
active in the market for the manufacturing of plastic automotive parts.
[11] Due to the above, the Commission concluded that the proposed transaction
was unlikely to substantially lessen or prevent competition in the above market.
We found no reason to disagree.
PUBLIC INTEREST
[12] The Commission noted the undertaking given by the merging parties that no
retrenchments would occur as a result of the proposed transaction. The
Commission also found that the proposed transaction was unlikely to have a
negative effect on employment.
[13] The Commission was therefore of the view that the proposed transaction was
unlikely to raise any other public interests concerns.
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CONCLUSION
[14] In light of the above, we concluded that the proposed transaction was unlikely
to substantially prevent or lessen competition in any relevant market. In
addition, we are of the view that no public interest concerns arise from the
proposed transaction.
[15] Accordingly, we approved the transaction without conditions.
30 April 2020
Mr Enver Daniels Date
Mr A Wessels and Prof. I Valodia concurring
Tribunal Case Manager: P Kumbirai
For the Merging Parties: L Mabidikane of Bowman Gilfillan
For the Commission: B Makgabo