Barloworld Transport (Pty) Ltd v Aspen Logistic Services (Pty) Ltd (LM157Oct15) [2015] ZACT 129 (22 December 2015)
- Citation
- [2015] ZACT 129
- Status
- Judgment
- Jurisdiction
- South Africa
- Court
- Competition Tribunal
- Panel
- Norman Manoim, Anton Roskam, Andiswa Ndoni
- Case number
- LM157Oct15
More details
- Court
- Competition Tribunal
- Panel
- Norman Manoim, Anton Roskam, Andiswa Ndoni
- Case number
- LM157Oct15
On this page
Professional case brief
Research organized from the available case record
01
Holding and result
The Tribunal found that the proposed transaction between Barloworld Transport and Aspen Logistic Services would not result in a substantial prevention or lessening of competition in any relevant market. The market share accretion was negligible, and the merging parties would remain constrained by larger competitors. Furthermore, the transaction would not have any adverse impact on employment or raise other public interest concerns. Accordingly, the Tribunal approved the merger unconditionally.
Court disposition
Merger approved unconditionally.
Orders
- The proposed transaction between Barloworld Transport (Pty) Ltd and Aspen Logistic Services (Pty) Ltd is approved without conditions.
02
Material facts
Parties
Barloworld Transport (Pty) Ltd
Applicant Counsel: Bowman GilfillanAspen Logistic Services (Pty) Ltd
Respondent Counsel: Bowman Gilfillan03
Procedural history
Posture
Merger Review / Approval
04
Questions and positions
Legal issues
- 01
Whether the proposed merger between Barloworld Transport and Aspen Logistic Services is likely to substantially prevent or lessen competition in any relevant market.
- 02
Whether the transaction raises any public interest concerns, including adverse impact on employment.
Party arguments
- Applicant
- Barloworld Transport argued that acquiring a controlling interest in Aspen would allow it to enter the market for temperature controlled distribution services and enhance its product offering. The transaction would benefit Aspen's shareholders and employees by integrating them into a larger group with broader offerings and access to a larger customer base.
- Respondent
- The Competition Commission submitted that there is no significant horizontal overlap between Barloworld Transport and Aspen, except for a minor overlap involving the KLL Group. The Commission found the market share accretion to be negligible and concluded that the merging parties are small players constrained by larger competitors. The transaction was deemed unlikely to substantially prevent or lessen competition, and no adverse public interest effects were identified.
05
Court’s reasoning
Legal principles
- 01
Competition Act, No. 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, No. 89 of 1998
Public interest considerations, including employment effects, must be assessed in merger proceedings.
06
Ratio, limits and disposition
Ratio decidendi
The Tribunal found that the proposed transaction between Barloworld Transport and Aspen Logistic Services would not result in a substantial prevention or lessening of competition in any relevant market. The market share accretion was negligible, and the merging parties would remain constrained by larger competitors. Furthermore, the transaction would not have any adverse impact on employment or raise other public interest concerns. Accordingly, the Tribunal approved the merger unconditionally.
Obiter and limits
- The Tribunal noted that the merging parties confirmed there would be no adverse impact on employment as a result of the transaction.
- No other public interest concerns were raised by the proposed merger.
Court disposition
Merger approved unconditionally.
- The proposed transaction between Barloworld Transport (Pty) Ltd and Aspen Logistic Services (Pty) Ltd 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: LM1570ct15
In the matter between:
BARLOWORLD TRANSPORT (PTY)
LTD
Primary Acquiring Firm
and
ASPEN LOGISTIC SERVICES (PTY)
LTD
Primary Target Firm
Panel
: Norman Manoim (Presiding Member)
: Anton Roskam (Tribunal Member)
: Andiswa Ndoni (Tribunal Member)
Heard on
: 15 December 2015
Order Issued on
: 15 December 2015
Reasons Issued on : 22 December 2015
Reasons for Decision
Approval
[1] On 15 December 2015, the Competition Tribunal ("Tribunal") approved the proposed transaction between Barloworld Transport (Pty) Ltd and Aspen Logistic Services (Ply} Ltd.
[2] The reasons for approving the proposed transaction follow.
Parties to proposed transaction
Primary acquiring firm
[3] The primary acquiring firm is Barloworld Transport (Ply) Ltd ("BWT") a private company incorporated in the Republic of South Africa. It is a logistics group and maintains a controlling interest in a number of transport companies in South Africa.
[4] The range of services offered by the BWT Group are extensive and include line-haul transport services; dedicated transport services;
warehousing and distribution services; abnormal transport services; fuel, gas and chemical transport services; and timber and cane
transport services.
[5] BWT recently acquired KLL Group (Pty) Ltd which has resulted in a minor overlap with the activities of the target firm. KLL Group currently conducts business as a multi-temperature food distributor in South Africa.
Primary target firm
[6] The primary target firm is Aspen Logistics Services (Pty) Ltd ("Aspen"), a road transport and logistics company involved in the transportation of temperature controlled fast-moving consumer goods in South Africa and neighboring countries.
Proposed transaction and rationale
[7] BWT intends to acquire a controlling interest of 51% in Aspen. Following which BWT will have sole control over Aspen.
[8] BWT submits that the proposed transaction will allow it to enter into the market for temperature controlled distribution services and augment its current product offering.
[9] Aspen submits that the proposed transaction presents an opportunity for Aspen's shareholders and employees to be part of a larger group, with a broader product offering and access to a larger customer base.
Impact on competition
[10] The Competition Commission ("Commission") submits that there is no horizontal overlap in the activities of BWT and Aspen. However, the Commission did identify a minor overlap with regards to the activities of the KLL Group and Aspen in the market for temperature controlled distribution services.
[11] The Commission found that the market share accretion within the relevant market was negligible. The merging parties are relatively small players in the market and would continue to be constrained by market leaders such as Imperial Cold Logistics (Pty) Ltd, Vector Logistics Ltd, Clover S.A (Ply) Ltd, Hestony Transport (Ply) Ltd, Unitrans Supply Chain Solutions (Ply) Ltd and Leiben Logistics (Pty) Ltd.
[12] The Commission therefore concluded that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market.
[13] We concur with the Commission's conclusion that the proposed transaction
is unlikely to substantially prevent or lessen competition in any relevant market.
Public interest
[14] The merging parties confirmed that the proposed transaction will not result in any adverse impact on employment. [1]
[15] The proposed transaction further raises no other public interest concerns.
Conclusion
[16] In light of the above, we conclude that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market. In addition, no public interest issues arise from the proposed transaction. Accordingly, we approve the proposed transaction unconditionally.
22 December 2015
DATE
_______
Mr Norman Manoim
Mr Anton Roskam and Ms Andiswa Ndoni concurring
Tribunal Researcher: Karissa Moothoo Padayachie
For the merging parties: Bowman Gilfillan
For the Commission: Nolubabalo Myoli
[1] Inter alia merger record page 3.
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