Main Street 1440 Proprietary Limited v Main Street 1444 Proprietary Limited and Another (LM092Aug16) [2016] ZACT 117 (11 November 2016)
The Tribunal found that the proposed transaction would not result in any product or service overlap between the acquiring group and the target firms, as the acquiring group does not have investments in the relevant maritime services sector. The Competition Commission's investigation confirmed that the transaction...
Source-derived case information.
- Citation
- [2016] ZACT 117
- Parties
- Applicant: Main Street 1440 Proprietary Limited; Respondent: Main Street 1444 Proprietary Limited; Respondent: SMIT Holdings SA Proprietary Limited
- Court
- Competition Tribunal
- Jurisdiction
- South Africa
- Case Number
- LM092Aug16
- Procedural Posture
- Merger Approval / Decision on Approval
- Outcome
- The proposed merger is approved without conditions.
- Judges
- Mondo Mazwai, Yasmin Carrim, Imraan Valodia
- Legal Topics
- Merger Notification, Public Interest, Market Definition, Competition Assessment
Source-derived case record
Summary, issues, holding and outcome
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Parties
Main Street 1440 Proprietary Limited
Applicant
Main Street 1444 Proprietary Limited
Respondent
SMIT Holdings SA Proprietary Limited
Respondent
Procedural Posture
Merger Approval / Decision on Approval
Legal Issues
- 1 Whether the proposed merger is likely to substantially prevent or lessen competition in any relevant market in South Africa.
- 2 Whether the proposed transaction raises any public interest concerns, including employment effects.
Ratio Decidendi
The Tribunal found that the proposed transaction would not result in any product or service overlap between the acquiring group and the target firms, as the acquiring group does not have investments in the relevant maritime services sector. The Competition Commission's investigation confirmed that the transaction would not substantially prevent or lessen competition in any market in South Africa. Furthermore, the merging parties demonstrated that there would be no negative impact on employment, with no job losses, redundancies, or retrenchments anticipated. No other public interest concerns were identified. Accordingly, the Tribunal concluded that the merger does not raise competition or...
Court Disposition
The proposed merger is approved without conditions.
Orders
- The proposed transaction between Main Street 1440 Proprietary Limited and Main Street 1444 Proprietary Limited and SMIT Holdings SA Proprietary Limited is approved unconditionally.
Full Case Text
Judgment text and source record
57 paragraphs
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: LM092Aug16
In the matter between:
MAIN STREET 1440 PROPRIETARY LIMITED Primary Acquiring Firm
and
MAIN STREET 1444 PROPRIETARY LIMITED AND Primary Target Firm(s)
SMIT HOLDINGS SA PROPRIETARY LIMITED
Panel
: Mondo Mazwai (Presiding Member)
:Yasmin Carrim (Tribunal Member)
: Prof lmraan Valodia (Tribunal Member)
Heard on
: 12 October 2016
Order Issued on
: 12 October 2016
Reasons Issued on : 11 November 2016
Reasons for Decision
Approval
[1] On 12 October 2016, the Competition Tribunal ("Tribunal") approved a proposed transaction between Main Street 1440 Proprietary Limited and Main Street 14444 Proprietary Limited and SMIT Holdings SA Proprietary Limited.
[2] The reasons for approving the proposed transaction follow.
Parties to proposed transaction
Primary acquiring firm
[3] The primary acquiring firm is Main Street 1440 Proprietary Limited ("BidCo"), a newly incorporated acquisition vehicle of RMBV Ventures Seven Proprietary Limited ("RMBV").
[4] BidCo is a newly incorporated acquisition vehicle which does not engage in any operations or business activities. BidCo is controlled by RMBV Ventures Seven Proprietary Limited ("RBMV"). RMBV is a subsidiary of RMB Private Equity Proprietary Limited ("RMB"),
which is an indirect subsidiary of FirstRand Investment Holdings Limited ("FRIHL"). FRIHL is a wholly owned subsidiary of FirstRand Limited ("FirstRand").FirstRand is not controlled by any firm.
[5] FirstRand and all its subsidiaries will collectively be referred to as the Acquiring Group.
Primary target firm
[6] The primary target firm is Main Street 14444 Proprietary Limited ("NewCo") and SMIT Holdings SA Proprietary Limited
("SHSA").
[7] NewCo is a newly incorporated acquisition vehicle which shall be controlled by SHSA prior to the implementation of the proposed transaction.
[8] SHSA is wholly controlled by SMIT International Overseas B.V. ("SIO"), a company incorporated in accordance with the laws of the Netherlands.
[9] NewCo, SHSA and their subsidiaries shall be referred to as the "Target Firms".
Proposed transaction
[10] The Acquiring Group intends to acquire 100% of the issued share capital of the Target Firms. Post-transaction, the Acquiring Group will control the Target Firms.
Impact on competition
[11] The Acquiring Group operates through a portfolio of business franchises, namely
RMB[1] First National Bank and Westbank. It is active in the financial service sector
which includes retail banking, broking, asset/investment management, private client management, corporate finance, interest rate
management, project finance, risk management, mortgage lending as well as other banking solutions.
[12] The Target Firms' activities include the provision of offshore maritime services, terminal services and in-port bunker supply services in South Africa.
[13] The Competition Commission (“Commission") considered the activities of the merging parties and found that there is no product or service overlap, as the Acquiring Group does not have any investments in companies that are active in the provision of offshore maritime services, terminal services and in-port bunker supply services in South Africa.
[14] Therefore the Commission concluded that the proposed transaction was unlikely to substantially prevent or lessen competition in any market in South Africa.
[15] We concur with the Commission's conclusion.
Public interest
[16] The merging parties submitted that the proposed transaction will not have any effect on employment in South Africa, and no job losses including redundancies or retrenchments are expected to arise from the proposed transaction.
[17] Furthermore, the proposed transaction does not raise any other public interest concerns.
Conclusion
[18] 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 without conditions.
11 November 2016
DATE
___________________
Ms Mondo Mazwai
Ms Yasmin Carrim and Prof lmraan Valodia concurring
Tribunal Researcher: Busisiwe Masina
For the merging parties: Mark Garden of Edward Nathan Sonnerberg Inc.
For the Commission: Nolubabalo Myoli
[1] RMB is a diversified financial services brand encompassing investment banking, fund management, corporate banking, private equity and advisory services. All business in the RMB brand stable are part of the wider FirstRand Group.