Assore Holdings (Pty) Ltd v Assore Limited and Others (LM039Jul21) [2021] ZACT 96 (28 September 2021)

Assore Holdings (Pty) Ltd v Assore Limited and Others (LM039Jul21) [2021] ZACT 96 (28 September 2021)

The Tribunal found that the proposed transaction constitutes an internal restructuring with no change in ultimate control, as Oresteel remains the controlling shareholder of the target firms. The transaction does not result in any horizontal overlap or market share accretion, and is unlikely to substantially prevent or lessen competition in any relevant market. The reduction in B-BBEE shareholding from 31.6% to 26.1% is considered temporary and does not negatively affect the net equity value or dividend flow to B-BBEE shareholders. Furthermore, B-BBEE shareholders will gain improved board representation, allowing for more meaningful participation in the direction of Assore. The...

Citation
[2021] ZACT 96
Parties
Applicant: Assore Holdings (Pty) Ltd; Respondent: Assore Limited; Respondent: African Mining and Trust Company (Pty) Ltd; Respondent: Assore Treasury Company (RF) (Pty) Ltd; Respondent: Ore & Metal Company (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
28 September 2021
Case Number
LM039Jul21
Procedural Posture
Merger Application / Reasons for Decision
Outcome
The merger is unconditionally approved.
Judges
Yasmin Carrim, Fiona Tregenna, Anton Roskam
Legal Topics
Merger Control, Public Interest, B Bbbee Shareholding, Internal Restructuring
Competition Law Commercial and Corporate Merger Control Public Interest B Bbbee Shareholding Internal Restructuring

Case Brief

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Parties

Assore Holdings (Pty) Ltd

Applicant

Assore Limited

Respondent

African Mining and Trust Company (Pty) Ltd

Respondent

Assore Treasury Company (RF) (Pty) Ltd

Respondent

Ore & Metal Company (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Reasons for Decision

Legal Issues

  1. 1 Whether the proposed internal restructuring and acquisition will substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the transaction will have a negative impact on public interest, including employment and B-BBEE shareholding.
  3. 3 Whether the reduction in B-BBEE shareholding and changes in board representation affect the greater spread of ownership.

Ratio Decidendi

The Tribunal found that the proposed transaction constitutes an internal restructuring with no change in ultimate control, as Oresteel remains the controlling shareholder of the target firms. The transaction does not result in any horizontal overlap or market share accretion, and is unlikely to substantially prevent or lessen competition in any relevant market. The reduction in B-BBEE shareholding from 31.6% to 26.1% is considered temporary and does not negatively affect the net equity value or dividend flow to B-BBEE shareholders. Furthermore, B-BBEE shareholders will gain improved board representation, allowing for more meaningful participation in the direction of Assore. The...

Court Disposition

The merger is unconditionally approved.

Orders

  • The acquisition of Assore Limited, African Mining and Trust Company (Pty) Ltd, Assore Treasury Company (RF) (Pty) Ltd, and Ore & Metal Company (Pty) Ltd by Assore Holdings (Pty) Ltd is unconditionally approved.