Al Rayyan Holding LLC v Enel Green Power Matimba 1 s.r.l (LM197Feb21) [2021] ZACT 14 (10 March 2021)
- Citation
- [2021] ZACT 14
- Status
- Judgment
- Jurisdiction
- South Africa
- Court
- Competition Tribunal
- Panel
- Enver Daniels, Mondo Mazwai, Yasmin Carrim
- Case number
- LM197Feb21
More details
- Court
- Competition Tribunal
- Panel
- Enver Daniels, Mondo Mazwai, Yasmin Carrim
- Case number
- LM197Feb21
On this page
Professional case brief
Research organized from the available case record
01
Holding and result
The Tribunal found that the proposed merger between Al Rayyan Holding LLC and Enel Green Power Matimba 1 s.r.l does not give rise to any horizontal or vertical overlaps in South Africa, and is unlikely to result in a substantial prevention or lessening of competition in any relevant market. The transaction does not have negative employment effects, as no retrenchments are envisaged and employees will be transferred under the same terms. The merger will increase the shareholding of historically disadvantaged individuals in certain renewable energy project companies, thereby advancing black economic empowerment. No public interest concerns were identified. Accordingly, the Tribunal approved the merger unconditionally.
Court disposition
Merger approved unconditionally.
Orders
- The large merger between Al Rayyan Holding LLC and Enel Green Power Matimba 1 s.r.l is approved without conditions.
02
Material facts
Parties
Al Rayyan Holding LLC
Applicant Counsel: Mark GriffithsEnel Green Power Matimba 1 s.r.l
Respondent03
Procedural history
Posture
Merger Review / Decision
04
Questions and positions
Legal issues
- 01
Whether the proposed merger would substantially prevent or lessen competition in any relevant market.
- 02
Whether the merger raises any public interest concerns under the Competition Act.
- 03
Whether the transaction would negatively affect employment or black economic empowerment.
Party arguments
- Applicant
- The applicant argued that the merger is an international transaction with no horizontal or vertical overlaps in South Africa, and that it would not result in any negative employment effects or retrenchments. The applicant further submitted that the transaction would increase the shareholding of historically disadvantaged individuals in certain project companies, thereby advancing black economic empowerment.
- Respondent
- The respondent, represented by the Competition Commission, confirmed that its investigation found no horizontal or vertical overlaps between the parties, no anticipated negative employment effects, and no public interest concerns. The Commission recommended unconditional approval of the merger.
05
Court’s reasoning
Legal principles
- 01
Competition Act 89 of 1998
A merger may only be prohibited if it is likely to substantially prevent or lessen competition in any relevant market.
- 02
Competition Act 89 of 1998
Public interest considerations, including employment and black economic empowerment, must be assessed in merger proceedings.
06
Ratio, limits and disposition
Ratio decidendi
The Tribunal found that the proposed merger between Al Rayyan Holding LLC and Enel Green Power Matimba 1 s.r.l does not give rise to any horizontal or vertical overlaps in South Africa, and is unlikely to result in a substantial prevention or lessening of competition in any relevant market. The transaction does not have negative employment effects, as no retrenchments are envisaged and employees will be transferred under the same terms. The merger will increase the shareholding of historically disadvantaged individuals in certain renewable energy project companies, thereby advancing black economic empowerment. No public interest concerns were identified. Accordingly, the Tribunal approved the merger unconditionally.
Obiter and limits
- The Tribunal noted that the transaction is an international one, with the acquiring and target firms incorporated in Qatar and Italy respectively.
- The Tribunal observed that the merger would result in joint control of the target firm by Al Rayyan and EGP, with positive implications for black economic empowerment in South Africa.
Court disposition
Merger approved unconditionally.
- The large merger between Al Rayyan Holding LLC and Enel Green Power Matimba 1 s.r.l is approved without conditions.
Source and reliance status
Competition Tribunal
This page organises the available record for research. Confirm quotations, current status, and subsequent treatment against the official source before relying on the case.
Judgment reading view
Judgment text
The complete available source text.
Competition Tribunal
Judgment
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case no: LM197Feb21
Al Rayyan Holding LLC (Primary Acquiring Firm)
And
Enel Green Power Matimba 1 s.r.l (Primary Target Firm)
Heard on: 10 March 2021
Order Issued on: 10 March 2021
Reasons Issued on: 10 March 2021
Revised Reasons Issued on: 24 March 2021
REASONS FOR DECISION
[1] On 10 March 2021, the Competition Tribunal unconditionally approved the large merger between Al Rayyan Holdings LLC (âAl Rayyanâ) and Enel Green Power Matimba NewCo 1 s.r.l (âEGP Matimba NewCo 1â).
[2] The transaction is an international transaction in which Al Rayyan, a company incorporated according to the laws of Qatar, will acquire 50% of the entire issued share capital held by Enel Green Power Matimba NewCo 1 from ENEL Green Power S.p.A, (âEGPâ) both incorporated under the laws of Italy.
[3] Post-merger, EGP Matimba NewCo 1 will be jointly controlled by Al Rayyan and EGP.
[4] Al Rayyan has [redacted] in South Africa. Its controlling shareholder, Qatar Investment Authority (âQIAâ) is [redacted] in South Africa through its [redacted] interest in Qatar Airways.
[5] EGP Matimba NewCo 1 is a limited liability company to be incorporated under the laws of Italy as a subsidiary of EGP, which is in turn a wholly owned subsidiary of Enel S.p.A (âEnelâ), a publicly listed Italian utility. Post-merger, EGP Matimba NewCo will hold EGPâs pre-existing 100% shareholding in Enel Green Power RSA Proprietary Limited (âEGP RSAâ). EGP RSA is incorporated in accordance with the laws of the Republic of South Africa and wholly owns Enel Green Power RSA 2 (RF) (âEGP RSA 2â). EGP RSA 2 controls five R4 Project Companies which were awarded bids under round 4 (R4) of the Renewable Energy Independent Power Producer Procurement Programme (âREIPPPPâ).
[6] The Competition Commission (âCommissionâ) found no horizontal or vertical overlaps in the activities of the merging parties.
[7] The proposed merger does not give rise to negative employment effects as no retrenchments are envisaged. The employees of the target firm will be transferred to the acquiring firm under the same terms of employment. In relation to the impact on Small Business and Black Economic Empowerment (âBEEâ), the merged entity will reduce its shareholding in 4(four) of its renewable energy Project Companies by up to 5% which will increase the shareholding of the existing historically disadvantaged individuals (âHDIâ) shareholders in each of the Project Companies.
[8] Taking all of the above into consideration, we concluded that the proposed transaction is unlikely to lead to a substantial prevention or lessening of competition in any relevant market.
[9] The proposed transaction does not give rise to any public interest concerns.
24 March 2021
Mr Enver Daniels Date
Ms Mondo Mazwai and Ms Yasmin Carrim concurring.
Tribunal Case Manager: Lumkisa Jordan
For the Merging Parties: Mark Griffiths of Norton Rose Fulbright
For the Commission: Wiri Gumbie and Rakgola Mokolo
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