1
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: LM059Jul20
In the matter between
KLK Landbou Limited Primary Acquiring Firm
And
Carpe Diem Raisins (Pty) Ltd Primary Target Firm
Panel : Ms Y Carrim (Presiding Member)
: Ms A Ndoni (Tribunal Member)
: Prof. F Tregenna (Tribunal Member)
Heard on : 28 July 2020
Order Issued on : 28 July 2020
Reasons Issued on
: 24 August 2020
REASONS FOR DECISION
APPROVAL
[1] On 28 July 2020, the Competition Tribunal (“Tribunal”) unconditionally
approved a large merger between KLK Landbou Limited and Carpe Diem
Raisins (Pty) Ltd.
[2] The reasons for the approval of the proposed transaction follow.
2
PARTIES TO THE PROPOSED TRANSACTION
Primary acquiring firm
[3] The primary acquiring firm is KLK Landbou Limited (“KLK”), a public company
that controls numerous firms. KLK is controlled by Senwes Limited (“Senwes”).
Senwes also controls numerous firms. KLK and Senwes and all the firms they
control shall be referred to as the acquiring group.
[4] The acquiring group is involved in inter alia, the supply of agricultural produce,
building supplies, livestock and moveable goods auctions, and the processing
and packaging of raisins through the primary target firm, which it jointly controls
pre-merger.
Primary target firm
[5] The primary target firm is Carpe Diem Raisins (Pty) Ltd (“Carpe Diem Raisins”),
a private company that controls one firm, its subsidiary Cool Raisins (Pty) Ltd.
Carpe Diem Raisins is jointly controlled by KLK (50%) and van der Colff
Beleggings (Pty) Ltd (50%) (“van der Colff Beleggings”).
[6] Carpe Diem Raisins is involved in the procurement, process ing, packaging,
sale and export of raisins that are mainly produced in the Orange River region.
PROPOSED TRANSACTION AND RATIONALE
[7] The acquiring group, through KLK, intends to acquire an additional [30%] of
Carpe Diem Raisins’ issued share capital. KLK’s shareholding in Carpe Diem
Raisins would thus be increased to 80%. Post-merger, KLK will have sole
control of Carpe Diem Raisins.
3
RELEVANT MARKET AND IMPACT ON COMPETITION
[8] The Competition Commission (“Commission”) assessed the activities of the
merging parties and found no horizontal overlaps in their activities , as the
acquiring group does not compete with Carpe Diem Raisins in the market for
the processing and packaging of raisins in South Africa.
[9] The Commission found that none of the firms within the acquiring group provide
any products or services that could be considered as interchangeable or
substitutable with the products or services offered by Carpe Diem Raisins.
[10] The Commission also found no vertical overlap s between the activities of the
merging parties, as none provide a product or service that could be considered
as an input in the business activities of another.
[11] The Commission found that the proposed transaction results in the acquiring
group moving from joint to sole control over Carpe Diem Raisins. Hence the
structure of the market was unlikely to change as the acquiring group already
exercises control and would continue to operate Carpe Diem Raisins as is.
[12] The Commission noted that Senwes had acquired several firms 1 in the five
years prior to this proposed transaction . The Commission found that the
proposed transaction was unlikely to raise any creeping merger concerns in this
market, as its merger assessment had accounted for these acquisitions in the
acquiring group’s activities.2
[13] In light of the above, the Commission concluded that the proposed transaction
was unlike ly to substantially lessen or prevent competition in any market in
South Africa.
1 Senwes acquired KLK, Grainovation (Pty) Ltd, and Suidwes Holdings (Ring Fenced) (Pty) Ltd – which
was recently conditionally approved by the Tribunal.
2 As discussed in paragraph four.
4
PUBLIC INTEREST
[14] The merging parties submitted that the proposed transaction would not have a
negative effect on employment or any other public interest considerations. The
merging parties also stated unequivocally that the proposed transaction w ould
not result in any retrenchments or job losses.
[15] The Commission engaged Carpe Diem Raisins’ employee representative, who
confirmed that the employees were notif ied of the proposed transaction and
that no concerns were raised by any employees.3
[16] The Commission also engaged the unions representing the acquiring group’s
employees, as well as the employee representative for the non -unionised
employees. The Commission found that none of these engagements raised any
public interest concerns.
[17] The Commission found that the proposed transaction does not raise any other
public interest concerns.
CONCLUSION
[18] 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, no public interest concerns arise from the proposed transaction.
[19] Accordingly, we approved the transaction without conditions.
3 The Commission found that van der Colff Beleggings’ only business in South Africa was to hold shares
in Carpe Diem Raisins and a farm, and that it did not qualify as small or medium sized enterprise.
5
24 August 2020
Ms Y Carrim Date
Ms A Ndoni and Prof. F Tregenna concurring
Tribunal Case Manager:
P Kumbirai
For the Merging Parties: A Le Grange of Cliffe Dekker Hofmeyr Inc
For the Commission: R Ncheche, R Maphwanya and A Mfuphi