Investec Bank Limited v MB Technologies Investments (Proprietary) Limited (020446) [2015] ZACT 26 (23 March 2015)
- Citation
- [2015] ZACT 26
- Status
- Judgment
- Jurisdiction
- South Africa
- Court
- Competition Tribunal
- Panel
- M Mokuena, A A Roskam, I I Valodia
- Case number
- 020446
More details
- Court
- Competition Tribunal
- Panel
- M Mokuena, A A Roskam, I I Valodia
- Case number
- 020446
On this page
Professional case brief
Research organized from the available case record
01
Holding and result
The Tribunal found that there is no horizontal overlap between Investec Bank Limited and MB Technologies Investments (Proprietary) Limited, as they operate in distinct sectors. The only vertical relationship identified was Investec's procurement of IT hardware from MBT, but the market is competitive with multiple suppliers. The Commission's analysis showed no risk of foreclosure or anti-competitive effects. Furthermore, the merging parties confirmed that the transaction would not adversely affect employment or raise other public interest concerns. The Tribunal agreed with the Commission's recommendation and concluded that the merger is unlikely to substantially prevent or lessen competition or negatively impact public interest. The transaction was therefore approved unconditionally.
Court disposition
Merger approved unconditionally.
Orders
- The proposed transaction between Investec Bank Limited and MB Technologies Investments (Proprietary) Limited is approved without conditions.
02
Material facts
Parties
Investec Bank Limited
Applicant Counsel: Natalie von EyMB Technologies Investments (Proprietary) Limited
Respondent03
Procedural history
Posture
Merger Approval / Final Determination
04
Questions and positions
Legal issues
- 01
Whether the proposed merger between Investec Bank Limited and MB Technologies Investments (Proprietary) Limited 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
- Investec Bank Limited argued that the transaction involves the exercise of certain rights leading to the acquisition of shares in MB Technologies Investments (Proprietary) Limited. The applicant asserted that there is no horizontal overlap between the parties, as Investec operates in the financial services sector and MBT in IT equipment distribution. The applicant further contended that the transaction would not result in any adverse impact on employment or other public interest concerns.
- Respondent
- The Competition Commission submitted that there is no horizontal overlap between the merging parties. It identified a vertical relationship, as Investec procures IT hardware from MBT, but found that the market is competitive with several suppliers. The Commission concluded that the transaction is unlikely to raise foreclosure issues or substantially lessen competition, and recommended unconditional approval.
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 impact, must be assessed in merger proceedings.
06
Ratio, limits and disposition
Ratio decidendi
The Tribunal found that there is no horizontal overlap between Investec Bank Limited and MB Technologies Investments (Proprietary) Limited, as they operate in distinct sectors. The only vertical relationship identified was Investec's procurement of IT hardware from MBT, but the market is competitive with multiple suppliers. The Commission's analysis showed no risk of foreclosure or anti-competitive effects. Furthermore, the merging parties confirmed that the transaction would not adversely affect employment or raise other public interest concerns. The Tribunal agreed with the Commission's recommendation and concluded that the merger is unlikely to substantially prevent or lessen competition or negatively impact public interest. The transaction was therefore approved unconditionally.
Obiter and limits
- The Tribunal noted that the presence of multiple suppliers in the IT hardware market mitigates any potential vertical foreclosure concerns.
- The merging parties' confirmation regarding employment impact was accepted as sufficient to address public interest considerations.
Court disposition
Merger approved unconditionally.
- The proposed transaction between Investec Bank Limited and MB Technologies Investments (Proprietary) Limited 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: 020446
In the matter between:
Investec Bank Limited............................................................................................Primary Acquiring Firm
And
MB Technologies Investments (Proprietary) limited...............................................Primary Target Firms
Panel: Medi Mokuena (Presiding Member)
: Anton A Roskam (Tribunal Member)
: Imraan I Valodia (Tribunal Member)
Heard on: 4 March 2015
Order Issued on: 4 March 2015
Reasons Issued on: 23 March 2015
Reasons for Decision (non-confidential)
Approval
[1] On 4 March 2015 the Competition Tribunal (“Tribunal”) unconditionally approved the merger between Investec Bank Limited (“investee”) and MB Technologies investments (Proprietary) Limited (“MBT”).
[2] The reasons for approving the proposed transaction follow.
Parties to transaction
Primary acquiring firm
[3] The primary acquiring firm is Investec, an international specialist banking group that provides a variety of financial products and services to a niche client base. It is a company incorporated in South Africa and a wholly-owned subsidiary of Investec Limited. Investec Limited is not controlled by any single firm.
Primary target firm
[4] MBT is active in the information technology (“IT”) sector as a seller and distributor of IT equipment. MBT is a private company incorporated in South Africa.
Proposed transaction and rationale
[5] The proposed transaction, through which Investec is exercising certain rights, is the acquisition by Investec of ... of the shares held in MBT.
Impact on competition
[6] The Commission found no horizontal overlap between the merging parties as Investec is an international banking group which provides financial services as opposed to MBT which is a seller and distributor of IT equipment. Further, Investec did not have a controlling interest in any company that sells or distributes IT hardware or equipment.
[7] The Commission identified a vertical relationship between the merging parties as Investec procures IT hardware and equipment from MBT. The Commission on analysing the effect of this relationship found that there were many players in the market such as Pinnacle Holdings and Mustek Electronics who supply IT hardware and equipment throughout South Africa. The Commission therefore concluded that the proposed transaction was unlikely to raise any foreclosure issues.
[8] Therefore the Commission recommended that the transaction be approved as there is no horizontal overlap and it does not raise any foreclosure concerns. We agree with the Commission’s recommendation and find that the transaction is unlikely to substantially lessen or prevent competition.
Public interest
[9] The merging parties confirmed that the proposed transaction will not result in an adverse impact on employment.1 The proposed transaction further raises no other public interest concerns.
Conclusion
[10] 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 transactions. Accordingly we approve the proposed transaction unconditionally.
23 March 2015
DATE
Imraan Valodia
Medi Mokuena and Anton Roskam concurring
Tribunal Researcher: Aneesa Ravat
For the merging parties: Natalie von Ey of Cliffe Dekker Hofmeyr Inc.
For the Commission: Amanda Mfuphi, Seema Nunkoo and Xolela Nokele
1Inter alia merger record page 6
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