COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No.: LM172Jan22
In the matter between:
Super Group Dealerships, A Division of Super
Group Trading (Pty) Ltd
Primary Acquiring Firm
And
A Business of Fiat Alfa Jeep in Arnold Chatz
Cars Constantia Kloof (Pty) Ltd
Primary Target Firm
Heard on: 12 April 2022
Order Issued on:
12 April 2022
REASONS FOR DECISION
[1] On 12 April 2022, the Competition Tribunal (“Tribunal”) unconditionally approved the
large merger in terms of which Super Group Dealerships , an indirect division of Super
Group Trading (Pty) Ltd (“Super Group Dealerships”) intends to acquire assets owned
and used by Arnold Chatz Cars Constantia Kloof (Pty) Ltd (“Arnold Chatz Cars”).1
[2] The transaction invo lves Super Group Dealership s acquiring the fixed assets, all
intellectual property, all inventory, and other assets (“Target Business”) owned and used
in the operation of business known as Fiat Alfa Jeep in Arnold Chatz Cars. Post-merger,
the Target Business will be controlled by Super Group Dealership s and by extension,
Super Group Limited (“Super Group”).
[3] Super Group Dealerships is comprised of 47 (forty-seven) motor vehicles dealerships of
which 41 (forty-one) are passenger vehicle s (“PVs”) dealerships and 6 (six) are light
commercial vehicle s (“LVCs”) dealerships. 2 Of the 47 (forty-seven) dealerships, 25
(twenty-five) are based within Gauteng province, while other dealerships are based in
Mpumalanga, North -West and Western Cape. Super G roup Dealership s also holds
franchise agreement across many original equipment manufacturers (“OEM”).3 In
addition, Super Group Dealerships comprise of adjacent used vehicle sales, part sales
and servicing businesses.
1Arnold Chatz Cars, which trades as Arnold Chatz Cars Constantia Kloof, is controlled by three
shareholders, namely Mr Derik Scorer (as to 51%), Mr Bradley Scorer (as to 41%) and Mark White (as to
10%). Arnold Chatz Cars is with respect to Fiat, Alfa Romeo and Jeep franchise motor dealership based
in Constantia Kloof, Roodepoort, within Gauteng province.
2 Super Group Trading is wholly owned subsidiary of Super Group Limited (“Super Group”), as to 79.96%
of the entire issued share capital of Super Group Holdings . Super Group is publicly listed on the
Johannesburg Securities Exchange. Super Gro up controls various subsidiaries active in logistics,
transportation, warehousing, and dealership businesses. Super Group Dealerships does not control any
other firm . Super Group Dealerships, its controllers and their subsidiaries will be referred to as th e
“Acquiring Group”.
3The franchise agreement includes Toyota, Mercedes Benz, Jeep Fiat Alfa, Peugeot, Citroen, Opel,
GWM, Isuzu, Hino, Nissan, Land Rover Jaguar, Volvo, Suzuki, Renault, Mazda and Ford.
2
[4] The Target Business is with respect to Fiat, Alfa Romeo and Jeep franchise motor
dealership based in Constantia Kloof, Roodepoort, within Gauteng province. The Target
Business is comprised of (i) fixed assets (including property, furniture, fittings, workshop
equipment, computer hardware and licenses to use all computer software, company
vehicles, stock of used spare parts, fixtures and fittings and speci alised tools) (ii)
intellectual property, (iii) all inventory, including new vehicles, used vehicles, stock of
new spare parts, stock consumable (iv) and all other assets owned and/or used in the
operation of the business known as Arnold Chatz Cars.
Competition Assessment
[5] The Competition Commission (“Commission”) considered the activities of the merging
parties and found that the proposed transaction raises horizontal overlap in the (i) market
for the sale of new passenger PVs and LCVs, (ii) market for the sale of used/ pre-owned
vehicles, (iii) in the market for the provision of after -sale services and parts and
accessories, and (iv) market for the provision of finance and insurance services.
[6] The Commission assessed the effects of the proposed transaction in the market for the
sale of new PVs and new LCVs. The Commission did not make any further assessment
of the effects of the merger in the market of used/pre-owned vehicles, in the market for
the provision of after -sale services and parts and accessories, and the market for the
provision of finance and insurance services, as it found that these markets do not raise
any concerns.
[7] The Commission defined the geographic market as market for the sale, the sale of new
PVs and the sale of LCVs within Gauteng province. The Commission’s analysis revealed
that the proposed transaction is unlikely to result in any change in the market structure
due to low market share accretions in market for sale of PV s and LCVs within Gauteng
province.
province.
[8] In its analysis of the proposed transaction on intra-brand and inter-brand competition the
Commission found that post-merger, the merged entity will continue to face intra-brand
competition from alternative Fiat, Alfa Romeo, and Jeep dealerships within Gauteng due
to the relatively low travelling distances amongst these dealers hips. Furthermore, the
Commission found that it is also unlikely to lead to a reduction of inter-brand competition
within the relevant market based on the availability of various OEMs within Gauteng. In
addition, the Commission found that in every area where the dealerships of the acquiring
group appear to be more present is comprised of a sufficient number of competitors
offering various brands.
[9] The Tribunal requested the parties to further provide an analysis of the market share of
the merging parties for Fiat, Alfa Romeo, and Jeep in Gauteng or provide the size of the
market for each brand for 2020 . In relation to intra-brand competition, the parties
submitted that the Commission has always evaluated whether the degree of competition
will be influenced at the inter-brand level, it has never regarded intra-brand competition
to constitute a market in and of itself, warranting market share estimates. Furthermore,
the Commission's focus is on the impact of the merger on the size of the merging parties;
group sizes were not considered in the merger assessment as they have no effect on
the assessment. After considering the above, the Tribunal was satisfied with the
submissions in light of the assessment done by the Commission on the level of inter -
brand competition within Gauteng.
[10] No third parties raised concerns regarding the effects of the proposed transaction on
competition.
3
[11] We conclude that the proposed transaction does not substant ially prevent or lessen
competition in any relevant market.
Public Interest
Effect on employment
[12] The merging parties submitted that the proposed transaction will not result in any
negative employment effects. The Commission contacted the employee representatives
of Target Business , who indicated that they had met with the Acquiring Group, who
assured them that, among other things, all black workers of the Target Business would
benefit from Broad-Based Black Economic Empowerment (“B-BBEE”) share ownership
within Super Group. The employee representatives expressed no concerns about the
transaction.4
[13] The Commission concluded that the proposed transaction is unlikely to result in negative
employment effects because there will be no amalgamation of dealerships which would
result in the duplication of roles.
Effect on the spread of ownership
[14] The Commission also assessed the effects of the merger on greater spread of
ownership. The merging parties submitted that a B-BBEE-firm, SG Tsogo Empowerment
Trust (“SGT Empowerment Trust”), for the benefit of all black employees within Super
Group, owns 33.47% of the shares of Super Group, with black women owning 8.25%.
Post-merger, all the Target Business will accordingly become beneficiaries of the SGT
Empowerment Trust. The Target Business does not have any B-BBEE shareholding.5
[15] After considering the above, the Commission concluded that proposed transaction does
not raise any public interest concerns. We concur with this finding.
Conclusion
[16] We find that the proposed transaction is unlikely to substantially prevent or lessen
competition in any relevant market. Furthermore, the proposed transaction raises no
public interest concerns.
04 May 2022
Ms Yasmin Carrim
Date
Ms Sha’ista Goga and Dr Thando Vilakazi concurring
Tribunal Case Managers: Sinethemba Mbeki
Tribunal Case Managers: Sinethemba Mbeki
For the Merging Parties: Saskai Le Roux of Super Group Holdings
For the Competition: Rakgole Mokolo and Grashum Mutizwa
4 Merger Recommendations, p23 of 27 para [49].
5 Merger Recommendations, p24 of 27 para [51].