Date : 25 July 2023
To : Bowmans Attorneys
Case Number: LM054Jun22
Takatso Aviation (Pty) Ltd And South African Airways State
Owned Company Ltd
You applied to the Competition Commission on 03 June 2022 for
merger approval in accordance with Chapter 3 of the Competition
Act.
Your merger was referred to the Competition Tribunal in terms of
section 14A of the Act, or was the subject of a Request for
consideration by the Tribunal in terms of section 16(1) of the Act.
After reviewing all relevant information, and the recommendation
or decision of the Competition Commission, the Competition
Tribunal approves the merger in terms of section 16(2) of the Act,
for the reasons set out in the Reasons for Decision.
This approval is subject to:
no conditions.
x the conditions listed on the attached sheet.
The Competition Tribunal has the authority in terms of section 16(3)
of the Competition Act to revoke this approval if
a) it was granted on the basis of incorrect information for which
a party to the merger was responsible.
b) the approval was obtained by deceit.
c)a firm concerned has breached an obligation attached to
this approval.
The Registrar, Competition Tribunal
Notice CT 10
About this Notice
This form is prescribed by the Minister of Trade and Industry in terms of section 27 (2) of the Competition Act 1998 (Act No. 89 of 1998).
Contacting
the Tribunal
The Competition Tribunal
Private Bag X24
Sunnyside
Pretoria 0132
Republic of South Africa
tel: 27 12 394 3300
fax: 27 12 394 0169
e-mail: ctsa@comptrib.co.za
Merger Clearance Certificate
This notice is issued in
terms of section 16 of
the Competition Act.
You may appeal
against this decision to
the Competition
Appeal Court within 20
business days.
1
ANNEXURE A
IN THE LARGE MERGER BETWEEN
TAKATSO AVIATION PROPRIETARY LIMITED
AND
SOUTH AFRICAN AIRWAYS STATE OWNED COMPANY LIMITED
CASE NUMBER: LM054Jun22
CONDITIONS
1. DEFINITIONS
1.1“Acquiring Firm” means Takatso;
1.2“Act” means the Competition Act 89 of 1998, as amended;
1.3“Affected Employees” means the Target Firm employees (including pilots) that were
retrenched during the business rescue proceedings at the Target Firm from December
2019 until 30 April 2021;
1.4“Approval Date” means the date the Tribunal issues a Clearance Certificate (Form
CT10) in terms of the Act;
1.5“Commission” means the Competition Commission of South Africa, a statutory body
established in terms of section 19 of the Competition Act;
1.6“Commission Rules” mean the Rules for the Conduct of Proceedings in the
Commission;
1.7“Competing Firm” means any firm that conducts any activities that compete with
those of the Target Firm. In relation to the Minorities, this specifically includes the
passenger airline activities conducted under the Lift brand.
1.8“Conditions” mean, collectively, the conditions referred to in this document;
2
1.9“Days” mean business days, being any day other than a Saturday, Sunday, or official
public holiday in the Republic of South Africa;
1.10“Divestiture” means the Minorities each disposing of their entire respective
shareholding in the Acquiring Firm as contemplated in these Conditions;
1.11“Implementation Date” means the date, occurring after the Approval Date, and after
the Divestiture, on which the Merger is implemented by the Merger Parties;
1.12“Merger” means the Acquiring Firm’s acquisition of 51% of the issued share capital
of the Target Firm;
1.13“Merger Parties” means the Acquiring Firm and the Target Firm;
1.14“Minorities” means Global Aviation Operations Proprietary Limited and Syranix
Proprietary Limited, which each respectively hold 10% of the issued share capital in
the Acquiring Firm;
1.15“Moratorium Period” means a period of 5 (five) years from the Implementation Date,
and includes a period between the Approval Date and the Implementation Date;
1.16“Purchaser” means the identified purchaser or purchasers of the Minorities’ respective
10% shareholding in the Acquiring Firm which must be an independent third party/ies
unrelated to the Minorities and not a Competing Firm.
1.17“South Africa” means the Republic of South Africa;
1.18“Takatso” means Takatso Aviation Proprietary Limited;
1.19“Target Firm” means South African Airways State Owned Company Limited, as well
as its subsidiaries, excluding Mango Airlines State Owned Company Limited;
1.20“Tribunal” means the Competition Tribunal of South Africa, a statutory body
established in terms of section 26 of the Competition Act; and
1.21“Tribunal Rules” mean Rules for the Conduct of Proceedings in the Tribunal.
3
2.EMPLOYMENT
2.1The Merger Parties shall not retrench any employee as a result of the Merger, for the
duration of the Moratorium.
2.2Any retrenchment during the Moratorium Period, will be presumed to be Merger
specific, unless the Merger Parties / Merged Entity can demonstrate otherwise.
2.3For the avoidance of doubt, the Merger Parties shall provide the Commission with
details of any proposed retrenchments for operational reasons during the Moratorium
Period, at least 30 calendar days prior to such retrenchments being implemented.
These details, to be provided to the Commission in writing, include details of the
number of employees proposed to be retrenched; the qualifications of each employee
proposed to be retrenched; a detailed explanation of the operational reasons for the
proposed retrenchments and any other documents or information requested by the
Commission.
2.4For avoidance of doubt, Merger specific retrenchments do not include (i) voluntary
retrenchments and/or voluntary separation arrangements; (ii) voluntary early
retirement packages; (iii) unreasonable refusals to be redeployed in accordance with
the provisions of the Labour Relations Act, 66 of 1995; (iv) resignations or retirements
in the ordinary course of business; (v) retrenchments lawfully effected for operational
requirements unrelated to the Merger; (vi) terminations in the ordinary course of
business, including but not limited to, dismissals as a result of misconduct or poor
performance; and (vii) any decision not to renew or extend a contract of a contract
worker.
2.5The Merger Parties shall use their best endeavours to communicate available
vacancies at the Target Firm to Affected Employees for a period of 24 (twenty-four)
months after the Approval Date.
2.6For a period of 24 (twenty-four) months after the Approval Date, the Merger Parties
shall give first preference to the Affected Employees to apply for any vacancies that
may arise at the Target Firm, on terms mutually acceptable to the Affected Employees
may arise at the Target Firm, on terms mutually acceptable to the Affected Employees
and the Merger Parties, provided that the Affected Employees have the requisite
qualifications, skills, know-how and experience required for those specific vacancies.
4
2.7The Merger Parties shall, during the Moratorium Period, maintain the total aggregate
minimum number of permanent employees of the Target Firm, at 1647.
3.DIVESTITURE
3.1The Merging Parties shall procure that the Minorities shall each entirely divest of their
respective 10% shareholding in the Acquiring Firm to a Purchaser.
3.2The Merger cannot be implemented prior to the successful implementation of the
Divestiture.
3.3Prior to the implementation of the Divestiture, the Acquiring Firm shall provide the
Commission with details of the proposed Divestiture. These details shall include, but
is not limited to, the transaction structure; details of the Purchaser; confirmation that
the Purchaser is independent and unrelated to the Minorities; confirmation that the
Purchaser is not a Competing Firm; and any other documents or information requested
by the Commission.
3.4The Commission shall, within 60 (sixty) calendar days of being notified of the proposed
Divestiture, provide its written confirmation of whether the proposed Divestiture
complies with this Condition.
3.5For the avoidance of doubt, should the Divestiture constitute a merger for the purposes
of the Act, the Divestiture cannot be implemented until same has been notified to the
Commission in the prescribed form (whether or not the mandatory thresholds are met)
and approved either unconditionally or subject to conditions.
4.MONITORING OF COMPLIANCE WITH THE CONDITIONS
4.1The Merger Parties shall circulate a copy of the Conditions to all employees, relevant
trade unions and employee representatives within 5 (five) Days of the Approval Date.
4.2As proof of compliance with clause 4.1, the Merger Parties will within 10 (ten) Days of
circulating the Conditions, submit to the Commission an affidavit by a senior official of
the Acquiring Firm attesting to the circulation of the Conditions and provide a copy of
the notices that were circulated to the employees, relevant trade unions and employee
representatives.
5
4.3Within 3 (three) months of each anniversary of the Approval Date up until the 5 th (fifth)
anniversary of the Implementation Date, the Merger Parties shall provide a suitable
and appropriately detailed annual report to the Commission regarding the Merger
Parties’ compliance with these Conditions.
4.4The Acquiring Firm shall inform the Commission in writing of the Implementation Date
within 5 (five) Days of the Implementation Date.
4.5The Acquiring Firm shall within 10 (ten) Days of implementing the Divestiture, provide
the Commission with an affidavit by a senior official of the Acquiring Firm attesting to
the implementation of the Divestiture. This affidavit shall be provided to the
Commission together with supporting documents such as the Acquiring Firm’s
amended shareholders agreement and memorandum of incorporation.
5.APPARENT BREACH
5.1Should the Commission receive any complaint in relation to non-compliance with the
above Conditions, or otherwise determines that there has been an apparent breach by
the Merger Parties of these Conditions, the breach will be dealt with in terms of Rule
39 of the Commission Rules read together with Rule 37 of the Tribunal Rules.
6.VARIATION
6.1The Commission and/or Merger Parties shall be entitled to apply to the Tribunal, on
good cause shown, for the relaxation, modification or substitution of any aspect of the
conditions.
7.GENERAL
7.1All correspondence in relation these Conditions must be submitted to the following
email addresses: mergerconditions@compcom.co.za and ministry@thedtic.gov.za