COMPETITION TRIBUNAL OF SOUTH AFRICA
Case no: LM119Sep22
In the large merger between:
Daimler Truck Holding AG Primary Acquiring Firms
And
Part of the commercial vans business of
Sandown Motor Holdings (Pty) Ltd
Primary Target Firm
[1] On 8 December 2022, the Competition Tribunal (“Tribunal”) unconditionally
approved the large merger between Daimler Truck Holding AG (“DT Holding AG”)
and part of the commercial vans business of Sandown Motor Holdings (“Sandown
Motor”).
Primary acquiring firm
[2] The Acquiring Firm is DT Holding AG, a German company listed on the Frankfurt
Stock Exchange. DT Holding AG controls Daimler Truck Southern Africa Limited
(“DTSA”). Daimler AG is the parent company of Mercedes -Benz AG (“Mercedes-
Benz”), Daimler Truck AG and Daimler Mobility AG (“Daimler Mobility”). DT Holding
AG and all firms controlled by it shall be referred to as the “Acquiring Group”.
Primary target firm
[3] The primary target firm comprises part of the commercial vans business of
Sandown Motor Holdings (Pty) Ltd (“Target Business”). Sandown Motor is a wholly
owned subsidiary of Mercedes-Benz South Africa Limited (“Mercedes-Benz SA”).
Panel : T Vilakazi (Presiding Member)
: Y Carrim (Tribunal Member)
: S Goga (Tribunal Member)
Heard on : 08 December 2022
Reasons issued on : 19 December 2022
REASONS FOR DECISION
Mercedes-Benz SA is in turn a wholly owned subsidiary of Mercedes-Benz AG
which is ultimately controlled by the Mercedes-Benz Group.
Activities of the parties
[4] The Acquiring Group is active in the truck and bus business and is focused on the
manufacturing and sale of trucks and buses.
[5] The Target Business comprises (i) the marketing and retailing of Mercedes-Benz
commercial vans and (ii) the provision of aftersales services for Mercedes-Benz
commercial vans from a single dealership located in Centurion.
Description of the proposed transaction
[6] The proposed transaction will be structured as follows:
6.1. DT Holding AG will indirectly, through its subsidiary DTSA, acquire all of the
shares in Sandown Motors.
6.2. DT Holding AG has already obtained the approval of the competition
authorities for the acquisition of Sandown Motors, in particular the trucks and
buses business of Sandown Motors (“T&B Transaction”).1 The target business
in the T&B Transaction related to marketing, sales and aftersales services for
Daimler trucks and buses only. The T&B Transaction formed part of a series
of transactions related to the separation by the Mercedes-Benz Group of its
trucks and buses business from its cars and vans business (the “spin-off”),
approved by the Tribunal on 19 August 2021. 2 The Proposed Transaction
envisages the separation of the commercial vans business of Sandown Motors
from the Mercedes-Benz Group.
6.3. The Proposed Transaction relates to a part of the commercial vans business
of Sandown Motors which is now intended to be included as part of the
transaction in terms of which DT Holding AG will acquire Sandown Motors.
6.4. Following the implementation of the Proposed Transaction, Sandown Motors
will be wholly owned and controlled by DTSA, a wholly owned subsidiary of DT
Holding AG. However, the passenger cars business of Sandown Motors will
not be transferred to DT Holding AG and will be sold to a third party prior to the
not be transferred to DT Holding AG and will be sold to a third party prior to the
implementation of the Proposed Transaction.
Competition assessment
[7] The Competition Commission (“Commission”) considered the activities of the
merging parties and found no horizontal overlap since DT Holding AG operates at
1 Case No. LM124Nov21, approved on 27 January 2022.
2 Merger Record p. 25, Merging Parties Merger Report para 1.2. Case No. LM049JUL21.
the manufacturing / wholesale level by supplying dealerships with Daimler vehicles,
including the Target Business. The Target Business operates at a retail dealership
level providing vehicles and after-sales services to end-users. The Commission
also notes the merging parties’ confirmation that Sandown Motors currently sells
and services no other brands save for Daimler and Mercedes-Benz vehicles.
[8] The proposed transaction results in a vertical relationship in that the Acquiring
Group supplies the Target Business with its commercial vans. However, the
Commission notes that the vertical relationship between the Acquiring Group and
the Target Business is pre-existing as the Target Business has been and will
continue to purchase commercial vans and parts from the Acquiring Group.
Furthermore, the Daimler Group confirmed that they will continue to supply
competing dealerships in line with the current practice.
[9] The Commission found that the proposed transaction is an internal restructuring
that had to be notified as a merger as part of the spin-off merger. Specifically,
because the competition authorities did not, at the time, consider the acquisition of
the Target Business as part of the T&B Transaction, the Proposed Transaction has
been notified for consideration by the competition authorities.3
[10] As such, the Commission found that the transaction does not alter the structure of
the market as it maintains the existing vertical relationship between the merging
parties.
[11] On this basis, we found that the proposed transaction will not lead to substantial
prevention or lessening of competition in any relevant market.
Public interest
Employment
[12] The Commission found that the Proposed Transaction will have no effect on the
employees of the merging parties. In particular, the merging parties submitted that
there will be no merger specific retrenchments in South Africa as a result of the
proposed transaction.
proposed transaction.
[13] The merging parties submitted that a substantial number of DT Holding AG's
employees in South Africa
No concerns relating to merger specific
retrenchments or employment were raised.
[14] Employees of the Target Business are represented by the Motor Industry Staff
Association (“MISA”). MISA submitted that the proposed transaction will not give
3 Merger Record p. 26, Merging Parties Merger Report para 1.7.
rise to any negative effects on employment and, in particular, no merger specific
retrenchments will arise as a result of the Proposed Transaction.
Effect on the promotion of a greater spread of ownership
[15] The Acquiring Group and the Target Group do not have ownership by any
historically disadvantaged persons (“HDPs”). As such, the proposed transaction
does not result in any dilution of shareholding held by HDPs.
[16] The merging parties submitted that the proposed transaction is the final step in an
internal restructuring
[17] In addition, the merging parties submit that the Acquiring Group is a level 5 B-
BBEE contributor based on their latest scoring while the Target Business is a level
6 B-BBEE contributor based on their latest scoring. The merging parties also
submit that measured on a scorecard basis, in circumstances where the merger
parties do not have any HDP shareholding, and the proposed transaction is neutral
in this regard, the Acquiring Group has a better overall B-BBEE rating.
[18] In light of the above, we find that the proposed transaction does not raise any public
interest concerns.
Conclusion
[19] We conclude that the proposed transaction is unlikely to substantially prevent or
lessen competition in any relevant market. Furthermore, there are no public interest
concerns raised by the transaction.
19 December 2022
Dr Thando Vilakazi Date
Ms Yasmin Carrim and Ms Sha’ista Goga concurring
Tribunal Case Manager: Makati Seekane
For the Merging Parties: Claire Alice Vertue and Burton Phillips of Webber
Wentzel
For the Commission: Horisani Mhlari and Thabelo Masithulela