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COMPETITION TRIBUNAL OF SOUTH AFRICA
Case no: LM183Jan21
In the matter between:
And
IA Bell and Company (Pty) Ltd Primary Acquiring Firm
Bell Equipment Limited Ltd Primary Target Firm
Panel : Y Carrim (Presiding Member)
: I Valodia (Tribunal Member)
: F Tregenna (Tribunal Member)
Heard on : 24 February 2021
Order Issued on : 24 February 2021
Reasons Issued on : 26 February 2021
REASONS FOR DECISION
Unconditional approval
[1] On 24 February 2021, the Competition Tribunal (“Tribunal”) unconditionally
approved the proposed transaction in terms of which IA Bell and Company (Pty)
Ltd (“IA Bell”) intends to increase its shareholding in Bell Equipment Limited
(“Bell Equipment”) through the acquisition of the shares held by John Deere
Construction & Forestry Company (“John Deere”).
[2] The reasons for the approval of the proposed transaction follow.
Parties to the transaction
[3] The acquiring firm is IA Bell, an investment holding company not controlled by
any individual or firm. Other than Bell Equipment, IA Bell holds shares in
Loinette Capital Limited, which provides asset-based finance solutions to its
customers.
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[4]The target firm is Bell Equipment, a public company listed on the Johannesburg
Stock Exchange.1 Bell Equipment is active in the manufacture, distribution and
sale of earth moving equipment, implements and accessories, as well as the
manufacture, distribution and sale of spares, parts and components, and the
after-sales support of its earth moving equipment.
Proposed transaction
[5] IA Bell intends to increase its shareholding in Bell Equipment from 38.73% to
70.1% through the acquisition of the shares held by John Deere. Post-merger,
IA Bell will own and control Bell Equipment.
Competition Analysis
[6] IA Bell is not active in and does not control any other firm, besides Bell
Equipment, that is active in the manufacturing and distribution of earth moving
equipment in South Africa. Therefore, there is no horizontal overlap in the
activities of the merging parties. Notwithstanding, the merging parties submitted
that Bell Equipment’s market share in the relevant market is approximately
18%. The proposed transaction does not result in a market share accretion or
change the structure of the market.
[7] The merged entity will be constrained by various competitors, such as
Barloworld Limited, Kemach Equipment (Pty) Ltd, Babcock International and
Komatsu Limited post-merger. Accordingly, the transaction does not give rise
to any competition concerns.
Public interest
[8] The proposed transaction does not give rise to any public interest concerns. 2
1 The five largest shareholders of Bell Equipment as at 27 November 2020 are (i) IA Bell; (ii) John
Deere; (iii) Allan Gray Asset Management; (iv) Ninety-One (Investec Asset Management); and (v)
Sanlam Investment Managers.
2 Merger Record, page 74.
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[9] However, the trade union, NUMSA, 3 had raised concerns with the Commission
about its current discussions with Bell Equipment. The Commission and the
merging parties confirmed that these discussions related to future and not
current employees of Bell Equipment. NUMSA was asked to make further
submissions to the Tribunal but declined to do so.
Conclusion
[10] In light of the above, the proposed transaction was approved unconditionally.
26 February 2021
Ms Yasmin Carrim Date
Prof. Imraan Valodia and Prof. Fiona Tregenna concurring.
Tribunal Case Manager : Duduetsang Mogapi
For the Merging Parties : A Mdee of ENS Africa
: M Griffiths of Norton Rose Fulbright
For the Commission : R Ncheche, R Maphwanya and A Mfuphi
3 National Union of Metalworkers of South Africa.