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COMPETITION TRIBUNAL OF SOUTH AFRICA
Case no: LM023May21
In the large merger between:
And
AIF I Africa C&I Renewable Energy
LLP
Primary Acquiring Firm
Reunert Investment Company No 2
(Pty) Ltd
Primary Target Firm
REASONS FOR DECISION
Unconditional approval
[1] On 23 June 2021, the Competition Tribunal unconditionally approved the large merger
between AIF I Africa C&I Renewable Energy LLP (“AIF I C&I”) and Reunert Investment
Company No 2 Proprietary Limited (“RIC2”).
[2] The transaction entails AIF I C&I acquiring 13.87% of the issued share capital of RIC2
through Lumika Renewables (Pty) Ltd (“Lumika”) and obtaining certain shareholder
veto rights in respect of RIC2.
[3] Lumika was established for the purposes of the proposed transaction and currently
does not conduct any business activities in South Africa. Lumika has no business
operations and purely exis ts as a holding company. Accordingly, as part of the
transaction Lumika will become jointly controlled by AIF I C&I (49.9%) and RAEH
(50.1%) post-merger.
[4] Post-merger AIF I C&I will exercise indirect joint control over RIC 2 through Lumika.
[5] AIF I C&I was established for the purposes of the proposed transaction , and it does
not conduct any business activities in South Africa. The APM Group comprises of firms
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that engage in a wide range of business activities such as infrastructure, transportation
and logistics and drilling services, amongst other activities.
[6] The RIC Group installs solar photovoltaic solutions (“the TFS Solution") in retail
centres, offices and factories. The TFS Solution (which essentially comprises of solar
panels that are connected to the electricity systems of the building on which they are
installed) allows the owner of the building to make use of solar energy to reduce its
electricity consumption. The RIC Group also provides energy and water usage
monitoring and managemen t software solutions (called COPPER and AQUA
respectively).
[7] The Competition Commission (“Commission”) considered the activities of the merging
parties and found that the transaction will not result in any horizontal overlap as the
APM Group does not control any firm that is active in the installation of solar
photovoltaic solutions in South Africa. The APM Group holds interests in the
infrastructure, transportation and logistics and drilling services, amongst other
activities while the RIC Group is involved in the installation of solar photovoltaic
solutions. Furthermore, the Commission found that there will be no vertical overlap
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.
[8] The proposed merger has no negative effect on employment as no retrenchments are
envisaged. The employees of the RIC Group are represented by an employee
representative as there is no trade union that represents a substantial number of
employees within the RIC Group. The Commission engaged the relevant employee
representative and the employee representative confirmed that the empl oyees were
made aware of the proposed transaction and no employee raised any concerns with
the proposed transaction. Further, the merging parties have provided an unequivocal
the proposed transaction. Further, the merging parties have provided an unequivocal
statement that the proposed transaction will not have a negative impact on
employment.
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[9] Taking all of the above into consideration, we concluded that the proposed transaction
is unlikely to lead to a substantial prevention or lessening of competition in any relevant
market. The proposed transaction does not give rise to any public interest concerns.
[10] We therefore approved the merger.
23 June 2021
Ms Mondo Mazwai Date
Prof Fiona Tregenna and Dr Thando Vilakazi concurring.
Tribunal Case Manager: Busisiwe Masina
For the Merging Parties: Desmond Rudman of Werksmans Attorneys
For the Commission: Rethabile Ncheche and Ratshidaho Maphwanya