Investec Bank Ltd v Clidet No. 808 (Pty) Ltd (35/LM/Apr08) [2008] ZACT 69 (4 September 2008)
- Citation
- [2008] ZACT 69
- Status
- Judgment
- Jurisdiction
- South Africa
- Court
- Competition Tribunal
- Panel
- Y Carrim, D Lewis, N Manoim
- Case number
- 35/LM/Apr08
More details
- Court
- Competition Tribunal
- Panel
- Y Carrim, D Lewis, N Manoim
- Case number
- 35/LM/Apr08
On this page
Professional case brief
Research organized from the available case record
01
Holding and result
The Tribunal found that there is no overlap between the activities of Investec Bank Ltd and Clidet No. 808 (Pty) Ltd, as Investec is not active in the sectors in which Clidet holds investments. The transaction involves Investec acquiring a 30% shareholding with minority protection rights, which does not amount to control over Clidet. The Tribunal further determined that the transaction does not give rise to any public interest concerns, such as employment, BEE, or impact on particular industries. Accordingly, the merger was approved unconditionally.
Court disposition
Merger approved unconditionally.
Orders
- The merger between Investec Bank Ltd and Clidet No. 808 (Pty) Ltd is approved without conditions.
02
Material facts
Parties
Investec Bank Ltd
Applicant Counsel: Cliffe Dekker Inc.Clidet No. 808 (Pty) Ltd
Respondent Counsel: Cliffe Dekker Inc.Amounts and remedies
- Investec's Shareholding to Be Acquired in Clidet: ZAR 30
03
Procedural history
Posture
Merger Clearance / Decision on Merger Approval
04
Questions and positions
Legal issues
- 01
Whether the proposed acquisition by Investec Bank Ltd of a 30% shareholding in Clidet No. 808 (Pty) Ltd raises competition concerns under the Competition Act.
- 02
Whether the transaction gives rise to any public interest issues warranting conditions.
Party arguments
- Applicant
- Investec Bank Ltd argued that the transaction is motivated by the strategic value of Clidet's BEE platform, which would enhance Investec's investment exposure in infrastructure and related sectors. The applicant submitted that there is no overlap between its activities and those of Clidet, and that the transaction would not negatively impact competition or public interest.
- Respondent
- Clidet No. 808 (Pty) Ltd, represented by African Revival Holdings and Dr. Maqetuka, supported the transaction, stating that it would facilitate further development of business interests in the infrastructure sector. The respondent agreed that there is no competitive overlap and no adverse public interest implications.
05
Court’s reasoning
Legal principles
- 01
Competition Act, No. 89 of 1998
A merger may be approved unconditionally if it does not substantially prevent or lessen competition and does not raise public interest concerns.
- 02
Competition Tribunal Guidelines
Minority protection rights in a merger do not necessarily confer control unless they allow for decisive influence over strategic commercial decisions.
06
Ratio, limits and disposition
Ratio decidendi
The Tribunal found that there is no overlap between the activities of Investec Bank Ltd and Clidet No. 808 (Pty) Ltd, as Investec is not active in the sectors in which Clidet holds investments. The transaction involves Investec acquiring a 30% shareholding with minority protection rights, which does not amount to control over Clidet. The Tribunal further determined that the transaction does not give rise to any public interest concerns, such as employment, BEE, or impact on particular industries. Accordingly, the merger was approved unconditionally.
Obiter and limits
- The Tribunal noted that the structure of minority protection rights should be carefully considered in future transactions to assess whether they confer control.
- The Tribunal observed that the BEE platform of Clidet may facilitate further investment opportunities in infrastructure sectors.
Court disposition
Merger approved unconditionally.
- The merger between Investec Bank Ltd and Clidet No. 808 (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: 35/LM/Apr08
In the matter between
Investec Bank Ltd Primary Acquiring firm
And
Clidet No. 808 (Pty) Ltd Primary Target Firm
Panel : Y Carrim (Tribunal member); D Lewis (Tribunal member) and N Manoim (Tribunal member)
Heard on : 18 June 2008
Decided on : 18 June 2008
Reasons Issued : 04 September 2008
Reasons for decision
Approval
[1] On 18 June 2008 the Competition Tribunal issued a Merger Clearance Certificate approving a merger between Investec Bank Ltd and Clidet No. 808 (Pty) Ltd unconditionally. The reasons appear below.
Parties
[2] The primary acquiring firm is Investec Bank Ltd (“Investec”), a public company listed on the JSE Securities Exchange. Investec is controlled by Investec Ltd (“Investec Ltd”).1
[3] The primary target firm is Clidet No. 808 (Pty) Ltd (“Clidet”). Clidet is a new company established under the company laws of the Republic of South Africa for the purpose of the instant transaction. Clidet is a wholly owned subsidiary of African Revival Holdings2 (Pty) Ltd (“African Revival”). African Revival is a wholly owned subsidiary of Dr. Maqetuka.3
Transaction
[4] In terms of the structure of the transaction, Investec intends to acquire 30% shares with minority protection rights in Clidet. As a condition precedent to this acquisition and as a restructuring of certain investments held by Dr. Maqetuka in his personal capacity, African Revival, an entity solely controlled by Dr. Maqetuka, will acquire Dr. Matequka’s interests in the following firms: Innovative Sanitary Solution, Nsele, Vital Distribution, Siyahamba Engineering, Isitali Consortium, Mateqs, Zoza and Clidet 779.
[5] Following this acquisition, Clidet will then acquire from African Revival an interest in the above firms according to the following proportions: Innovative Sanitary Solution (50%), Nsele (25%), Vital Distribution (15%), Siyahamba Engineering (36%), Isitali Consortium (10%), Mateqs (100%), Zoza (50%) and Clidet 779 (100%).4
Rationale
[6] Investec submits that it sees Clidet’s BEE platform as a strength from which it would grow its investment exposure in the broader infrastructure sector and related industries such as transport, rail and power.
[7] From Dr. Matequka’s perspective, the transaction will enable him to further develop his business interest in the infrastructure sector where a number of pipeline opportunities have arisen.
Parties Activities
[8] The Investec group is an international, specialist banking group that provides a diverse range of financial products and services to a niche client base. Investec’s principal business is divided into investment banking, treasury and specialised finance, private client banking, portfolio management and stock broking as well as asset management.
[9] Clidet is an investment holding company which does not offer products or services. It hold interests in firms involved in plumbing,
telecommunications, steel merchant, steel scaffolding and engineering.
Competition analyses
[10] There is no overlap between the activities of the merging parties as Investec is not active in the sectors in which Clidet has investments.
Public interest
[11] The transaction does not give rise to any public interest issues and is accordingly approved without conditions.
_______ 04 September 2008
Y Carrim Date
Tribunal Member
Concurring: D Lewis and N Manoim
Tribunal Researcher : I Selaledi
For the merging parties : Cliffe Dekker Inc.
For the Commission : Thabelo Ravhugoni (Mergers & Acquisitions)
1 Investec Ltd’s primary South African subsidiaries are Investec Group Data, Investec Management Holdings (Pty) Ltd, Investec
Property Group Holdings Ltd, Investec Assurance Ltd, Investec Employee Benefits Holdings (Pty) Ltd and Fedsure International Ltd.
2 African Revival has non-controlling interest in the following firms: Siyahamba Engineering, Venus Railway Solutions, Mitsui & Co African Revival Solutions and African Revival Consortium.
3 Dr. Maqetuka has interests in the following firms: Innovative Sanitary Solutions (50%), Nsele Trading (25%), Vital distribution Solutions (15%), Africa Revival (100%), Maqeks Investments (100%), Zoza Investment Company (50%), Kulungile Metals (2.5%) and Clidet 779 (100%).
4 The parties submit that while Clidet will have 100% share in Clidet 779, the voting rights in Clidet 779 will be ceded to African Revival.
3
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