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COMPETITION TRIBUNAL OF SOUTH AFRICA
Case no: LM055Aug21
Imperial Capital Limited
Imperial Logistics Limited (Primary Acquiring Firms)
And
Lift Logistics Holdco
Greendoor Group (Pty) Ltd (Primary Target Firms)
Heard on: 22 September 2021
Order Issued on: 22 September 2021
Reasons Issued on: 23 September 2021
REASONS FOR DECISION
[1] On 22 September 2021, the Competition Tribunal (“Tribunal”) unconditionally
approved a large merger whereby Imperial Logistics Limited (“Imperial”), through its
wholly owned subsidiary, Imperial Capital Limited (“Imperial Capital”), intends to
ultimately acquire the entire issued share capital in Lift Logistics Holdco (“J&J Group”)
and its subsidiary, Greendoor Group Proprietary Limited (“Greendoor”). Post-merger,
Imperial will control J&J Group and Greendoor.
[2] Imperial is not controlled by any single firm or individual as its shares are widely held.
Imperial Capital is an investment holding company and does not trade on its own but
controls several operational subsidiaries which are mostly located across the Southern
Africa Development Community (“SADC”) region.
[3] Imperial, Imperial Capital and their subsidiaries will be referred to as the “Acquiring
Group”.
[4] The Acquiring Group is involved in market access and l ogistics. Its market access
activities relate to the provision of route-to-market solutions that provide its clients with
a means of reaching their customers and consumers through comprehensive channel
strategies that integrate sourcing sales, distribution and marketing. Through its
logistics operations it manages the movement of goods on behalf of clients between
specified locations, combining different transportation modes and types.
[5] J&J Group is duly incorporated in accordance with the laws of Mauritius. Greendoor is
duly incorporated in accordance with the laws of the Republic of South Africa.
Greendoor is controlled by Lift Haulier (“Lift Haulier”), which is in turn solely controlled
Greendoor is controlled by Lift Haulier (“Lift Haulier”), which is in turn solely controlled
by J&J Group. J&J Group and its subsidiaries will be referred to as the “Target Group”.
[6] The Target Group provides integrated end-to-end logistics which range from transport
to port agency services and warehousing. It specialises in international transportation
between Mozambique, Zimbabwe, Zambia, Malawi, South Africa and the Eastern
DRC. In South Africa, the Target Group’s only subsidiary is Greendoor, whose main
route is the North/South Corridor which provides ser vices along the corridors from
South Africa to Zambia and the Eastern DRC. Greendoor specialises in the
transportation of containerised and break -bulk cargo from Durban and Richards Bay
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in South Africa to Zimbabwe, Zambia and the Katanga Province of the DRC (and vice
versa).
Competition assessment
[7] The Competition Commission (“Commission”) assessed the merging parties’ activities
and found that their transportation activities have, at best, a notional horizontal overlap
based on the general type of services they offer (which are largely offered through
haulage trucks and associated logistic services) albeit dissimilar areas of focus. For
instance, while both the merging parties offer cross-border transportation services, the
Acquiring Group primarily focuses on logistics services to automotive, chemical,
healthcare fastmoving consumer goods (“FMCG”) and fuel companies’ customers ,
while the Target Group focuses on the transportation of mainly mineral ores between
South Africa and its neighbouring SADC countries.
[8] The Commission further found that the differences in the line of products that the
parties haul (FMCG as opposed to mineral ores) extend to the types of trailers each
utilises to haul the products. The haulage of F MCG requires reefers or refrigerated
trailers whereas mineral ores require flat -bed trailers. The Acquiring Group utilises
reefers or refrigerated trailers to transport FMCG and healthcare and the Target Group
utilises fled -bed trailers to transport minera l ores. The Acquiring Group does not
operate any flat-bed trucks and equally the Target Group does not operate any reefer
trucks since the trailers would not be compatible with their respective lines of business.
[9] The Commission further found that the Acquiring Group is focused more on the
transportation of goods in the domestic market whilst the Target Group has no
presence in the local market, largely focusing on transporting mineral ores on cross -
border routes. Furthermore, the merger parties focus on different types of customers.
[10] Competitors and customers of the merging parties raised no concerns regarding the
proposed merger.
proposed merger.
[11] Based on the foregoing, the Commission was of the view that the proposed transaction
is unlikely to lead to a substantial prevention or lessening of competition in any relevant
market. We have no reason to disagree with this conclusion.
Public interest
[12] The proposed transaction raises no public interest concerns.
[13] Regarding ownership, the proposed transaction will promote the spread of ownership
by Historically Disadvantaged Persons (“HDPs”). T he merging parties submitted that
Public Investment Corporation (“PIC”) and Ukhamba Ho ldings (Pty) Limited
(“Ukhamba”) are the registered B-BBEE shareholders of the Acquiring Group, with a
collective shareholding of 19.62%. The merging parties further submitted that HDPs
own an economic interest of 48.56% in the Acquiring Group and 17.58% of this is in
the hands of black women. The Target Group currently does not have any B-BBEE
shareholding.
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Conclusion
[14] We conclude that the proposed transaction is unlikely to substantially prevent or lessen
competition in any relevant market. Furthermore, it raises no public interest concerns.
23 September 2021
Mr Andreas Wessels Date
Prof Imraan Valodia and Mr Halton Cheadle concurring
Tribunal Case Manager: Camilla Mathonsi
For the Merging Parties: Avias Ngwenya and Anthony Norton of Nortons Inc
For the Commission: Rakgole Mokolo and Grashum Mutizwa