Latest decisions by the Competition Commission
28 Aug 2017
1. Key decisions on Mergers and Acquisitions
1.1 Coricraft Group (Pty) Ltd v Prostaflo Promotions 28 (Pty) Ltd trading as Sleepworld
The Commission has approved the proposed merger, without conditions, whereby Coricraft Group (Pty) Ltd (Coricraft) intends to acquire Prostaflo Promotions 28 (Pty) Ltd trading as Sleepworld (Sleepworld).
Coricraft manufactures household furniture such as couches and tables, and retails same to the general public. Coricraft also retails bed bases and mattresses (beds) through its bed division, Dial-a-Bed. Sleepworld manufactures and supplies beds which are sold to bed retailers such as Coricraft.
The proposed transaction is unlikely to substantially prevent or lessen competition. In addition, the proposed transaction does not raise any public interest concerns.
1.2 Lenmed Health (Pty) Ltd v Capensis Management (Pty) Ltd
The Commission has approved, without conditions, the proposed merger whereby Lenmed Health (Pty) Ltd (Lenmed) acquired Capensis Management (Pty) Ltd (Capensis) t/a eThekwini Hospital and Heart Centre (Pty) Ltd (eThekwini Hospital). This transaction was implemented in 2010 without being notified to the Commission.
The Lenmed Group provides private patient healthcare services through the management and ownership of hospitals and through related health services. eThekwini Hospital provides private hospital services to the Durban community. These services include heart, lung and kidney transplant services, two cardiac cathetisation labs, two major operating theatres, 24 hour trauma unit, cardiac theatre, 42 intensive care unit beds, radiology and pathology and all major medical disciplines.
Since this transaction is assessed retrospectively, the Commission is of the view that the transaction did not prevent or lessen competition within the relevant markets at the time it was implemented in 2010. In addition, the proposed transaction did not raise any public interest concerns.
1.3 Futuregrowth Asset Management (Pty) Ltd, acting as agent for Old Mutual Life Assurance Company (South Africa) Ltd v Retail Capital (Pty) Ltd
The Commission has approved, without conditions, the proposed merger whereby Futuregrowth Asset Management (Pty) Ltd (Futuregrowth) intends to acquire Retail Capital (Pty) Ltd (Retail Capital).
Futuregrowth acts as a third party fiduciary asset manager in its capacity as agent for Old Mutual Life Assurance Company (South Africa) Limited. Futuregrowth is a wholly owned subsidiary of Old Mutual Investment Group Holdings which is a wholly owned subsidiary of Old Mutual Group Holdings (South Africa) (Pty) Ltd (OMSA). OMSA indirectly controls Nedbank Limited (Nedbank). Nedbank Group is then holding company for all the group’s subsidiaries and affiliates and with its principal banking subsidiary being Nedbank, a commercial bank and as such, is a source of external finance for SMEs.
Retail Capital is a financier of SMEs through a funding method known as business cash advance. Retail Capital links its repayments to the turnover of their customers. It does not require security or place restrictions on the use of the funds. Retail Capital, therefore, does not provide finance to its customers in the traditional sense, for example, in the same way traditional banks such as Nedbank and others do.
The proposed transaction is unlikely to substantially prevent or lessen competition in the provision of finance to SMEs. In addition, the proposed transaction does not raise any public interest concerns.
1.4 FMC Corporation v The divestment Business of E.I. DuPont de Nemours and Company
The Commission has approved the proposed merger, without conditions, whereby FMC Corporation (FMC) intends to acquire the relevant insecticide division and applicable research and development (R&D) activities (Divestment Business) of E.I. du Pont de Nemours and Company (DuPont).
The proposed transaction is a result of undertakings made by DuPont and the Dow Chemical Company (Dow) to the Commission, as part of the merger review proceedings relating to the merger between Dow and DuPont. The Commission recommended to the Tribunal that the DowDuPont Merger be approved subject to the condition that the identified activities of DuPont be divested to address concerns that the Commission identified in relation to certain insecticide product overlaps between Dow and DuPont.
The condition required that DuPont divest of its relevant insecticide division and applicable research and development activities (divestment business). The divestment business consists of the insecticide active ingredients/substances (Als), the insecticide divestment formulated products in South Africa and all tangible and intangible assets and personnel related to DuPont’s business of developing, synthesizing, manufacturing, packaging and selling the insecticide divestment Als and the insecticide divestment formulated products for their use in South Africa.
FMC, an American specialty chemicals firm, has global interests in agricultural, industrial and consumer markets. FMC’s agricultural business develops, manufactures and markets crop protection products including insecticides, herbicides and fungicides. FMC SA was established to obtain and maintain the FMC product registrations in South Africa and merely provides regulatory services to the FMC group of companies who own and sell FMC’s products through independent distributors in South Africa. FMC SA does not perform any further business activities, has no sales and no employees in South Africa.
The primary target firm is the relevant insecticide division and applicable research and development activities (divestment business) of E.I. du Pont de Nemours and Company (DuPont), a public company incorporated in terms of the laws of the USA. DuPont is the ultimate parent company of the DuPont Group which researches, develops, produces, distributes and sells a variety of chemical products, polymers, agro-chemical, seeds, food ingredients, and other materials. Locally, DuPont is involved in the distribution of various seeds including maize and sunflower seeds. DuPont is also involved in the distribution of agrochemicals (i.e. insecticides, herbicides and fungicides).
The proposed merger does not result in a substantial prevention or lessening of competition in any market. In addition, the proposed transaction does not raise any public interest concerns.
1.5 Gretzky Bidco Pte. Ltd v iNova Group of companies including certain immovable assets
The Commission has recommended to the Tribunal that the proposed merger be approved, without conditions, whereby Gretzky Bidco Pte. Ltd (Bidco) intends to acquire iNova Pharmaceuticals (Pty) Ltd (iNova SA).
Bidco, a special purpose vehicle company incorporated in accordance with the laws of Singapore. Bidco is jointly controlled by two shareholders. The first shareholder is a global alternative asset manager which manages funds invested globally and controls a number of entities active in South Africa. The second shareholder is a private equity fund manager or advisor of unit trusts.
iNova SA is a pharmaceutical company that researches, develops, sells and distributes a diversified portfolio of prescription and over the counter products. iNova SA’s activities include the sale and distribution of nutraceutical products. The acquiring firm, through Nature’s Bounty Co (Bounty), also distributes a range of over the counter supplements via health stores for general health.
The proposed transaction is unlikely to substantially prevent or lessen competition in the relevant market. In addition, the proposed transaction does not raise any public interest concerns.
1.6 Gemgrow Properties Ltd v Erf 266 Louis Trichardt (Pty) Ltd in respect of the property letting enterprise known as Checkers Centre and others
The Commission has recommended to the Tribunal that the proposed merger be approved, without conditions, whereby Gemgrow Properties Limited (Gemgrow) intends to acquire 9 property letting enterprises situated in Louis Trichardt, Limpopo Province currently owned by Erf 266 Louis Trichardt (Pty) Ltd (Erf 266), the Solly Noor Trust and Solly Noor Properties (Pty) Ltd (Solly Noor Properties).
Gemgrow (formerly known as Synergy Income Fund Limited) is a Real Estate Investment Trust listed on the JSE. Gemgrow is controlled by Arrowhead Properties Limited.
The primary target firms are situated in Louis Trichardt, Limpopo and are classified as retail and Grade B office properties. They are:
- The Solly Noor Trust in respect of the property letting enterprises known as the Legal Aid Board Building, Hawana Noor Centre, Foschini Building, Total Sports Building, Pep Stores Building and the Absa Building;
- Solly Noor Properties in respect of the property letting enterprises known as the Shoprite Centre and the Noor Centre; and
- Erf 266 in respect of the property enterprise known as the Checkers Centre.
The proposed transaction is unlikely to substantially prevent or lessen competition in any market in South Africa. In addition, the proposed transaction does not raise any public interest concerns.
1.7 K2012150042 (South Africa) (Pty) Ltd v Win Twice Properties (Pty) Ltd and Bedford Square Properties (Pty) Ltd
The Commission has recommended to the Tribunal that the proposed merger be approved, without conditions, whereby K2012150042 (South Africa) (Pty) Ltd (K2012) intends to acquire Win Twice Properties (Pty) Ltd (WTP) and Bedford Square Properties (Pty) Ltd (BSP).
K2012, ultimately controlled by Old Mutual Group Holdings (South Africa) (Pty) Ltd, is a diversified property ownership firm with a portfolio of 34 immovable properties and rental enterprises. WTP and BSP are two property investment firms which own the immovable property and letting enterprises known as Bedford Centre and Bedford Square which both comprise lettable retail space and office space.
The proposed transaction is unlikely to substantially prevent or lessen competition. In addition, the proposed transaction is unlikely to raise any public interest concerns.
1.8 Old Mutual PLC v Old Mutual (Netherlands) BV
The Commission has recommended to the Tribunal that the proposed merger be approved, without conditions, whereby Old Mutual plc (OM plc) intends to acquire Old Mutual (Netherlands) BV (OM BV).
OM plc, a UK company, is the holding company for the Old Mutual group of companies (Old Mutual Group) globally which provides investment, savings, life assurance, asset management, banking and property and personal insurance in Africa, the Americas and Asia. OM BV is a holding company incorporated in the Netherlands and does not supply any products or services. OM BV is an indirectly, wholly-owned subsidiary of OM plc.
The proposed transaction is unlikely to substantially prevent or lessen competition in any market in South Africa. In addition, the proposed transaction does not raise any public interest concerns.
1.9 CEP IV Investment 16 SARL v ADB Safegate Luxembourg SA
The Commission has approved, without conditions, the proposed merger whereby CEP IV Investment 16 SARL (CEP Bidco) intends to acquire ADB Safegate Luxembourg SA (ADB Safegate).
CEP Bidco is a newly established private company incorporated in accordance with the laws of Luxembourg. CEP Bidco is controlled by Carlyle Europe Partners IV LP, a fund managed by affiliates of Carlyle, a global alternative asset manager which manages funds that invest globally.
ADB Safegate, a Luxembourg company, is indirectly owned by investment funds managed and/or advised by PAI Partners SAS France, a private equity firm. It provides integrated airfield guidance solutions to airports to ensure safety of on-the-ground aircraft traffic and enhanced airport performance.
The proposed transaction is unlikely to substantially prevent or lessen competition in any market. In addition, the proposed transaction does not raise any public interest concerns.
1.10 Harrowlane Investments (Pty) Ltd v ICC Kwa-Thema (Pty) Ltd
The Commission has approved, without conditions, the proposed merger whereby Harrowlane Investments (Pty) Ltd (Harrowlane Investments) intends to acquire ICC Kwa-Thema (Pty) Ltd (ICC Kwa Thema).
Harrowlane Investments is a dormant company that operated a hybrid cash and carry of groceries and general merchandise business from Glenwood, Durban. ICC Kwa-Thema operates as a hybrid cash and carry of groceries and general merchandise in Brakpan.
The proposed transaction is unlikely to substantially prevent or lessen competition in any market in South Africa. In addition, the proposed transaction does not raise any public interest concerns.
2. Non Referrals: The Commission has taken a decision to non-refer (not to prosecute) the following cases:
2.1 Christine Chetty v Cell C
The Commission is of the view that the conduct complained of does not contravene the Competition Act.
2.2 Thandeka Nxumalo v Ann Atkinson Talent Ahead Recruitment Specialist
The Commission is of the view that the conduct complained of does not contravene the Competition Act.
2.3 Ithotho (Pty) Ltd v Premier of the KZN Province, KZN Gaming Board, MEC for Finance KZN
The Commission is of the view that the conduct complained of does not contravene the Competition Act.
2.4 Randall Koen v IUM Insurance, Atomic Brokers
The Commission is of the view that the conduct complained of does not contravene the Competition Act.
2.5 Seishiro Masilo v Hollard Insurance
The Commission is of the view that the conduct complained of does not contravene the Competition Act.
2.6 Eugene Logan Fray v Vodacom Service Provider
The Commission is of the view that the conduct complained of does not contravene the Competition Act.
2.7 Polyoak Packaging (Pty) Ltd v Eskom in first instance and Municipalities in second instance
The Commission is of the view that the conduct complained of does not contravene the Competition Act.
2.8 Portcab & Shuttle Services v Blunden Tours
The Commission is of the view that the conduct complained of does not contravene the Competition Act.
2.9 Mister Man Automotive Engineering (Pty) Ltd v Siyabonga Ncanana of Ethekwini
Municipality
The Commission is of the view that the conduct complained of does not contravene the Competition Act.
