Masana Petroleum Solutions (Proprietary) Limited v BP Southern Africa (Proprietary) Limited and Others (LM112Aug15) [2015] ZACT 98 (18 November 2015)

COMPETITION TRIBUNAL OF SOUTH AFRICA

Case No: LM112Aug15

In the matter between:

Masana Petroleum Solutions (Proprietary) Limited

Primary Acquiring Firm and

BP Southern Africa (Proprietary) Limited

with respect to the Mining Lubricants and

Specialty Chemicals Divisions

Primary Target Firms

Panel

: Medi Mokuena (Presiding Member)

: Anton Roskam (Tribunal Member)

:Andiswa Ndoni (Tribunal Member)

Heard on

: 21 October 2015

Order Issued on

: 21 October 2015

Reasons Issued on : 18 November 2015

Reasons for Decision

Approval

[1] On 21 October 2015, the Competition Tribunal ("Tribunal") unconditionally approved the merger between Masana Petroleum

Solutions (Proprietary) Limited ("Masana") and BP Southern Africa (Proprietary) Limited.

[2] The reasons for approving the proposed transaction follow.

Parties to transaction

Primary acquiring firm

[3] The primary acquiring firm, Masana is controlled by BP South Africa which is in turn controlled by BP Global Investments Ltd, which is a wholly owned subsidiary of BP pie. Masana is involved in the distribution of petroleum products such as petrol.

Primary target firm

[4] The Target firms are the distribution channel of the Mining Lubricants and Speciality Chemicals Divisions {"Target Businesses") of BP. The Target Businesses do not control any firm. The Target Businesses are involved in the distribution of mining lubricants and specialty chemicals.

Proposed transaction and rationale

[5] In terms of the proposed transaction Masana will acquire the Target businesses as a going concern. Pursuant to the transaction Masana will own and control the Target Businesses while BP will retain indirect control of the Target Businesses.

[6] The merging parties submitted that the proposed transaction is in line with their business strategy to increase BEE ownership.

Impact on competition

[7] The Commission, when investigating the activities of the merging parties found that there is no overlap between the merging parties because Masana is not active in the distribution of mining lubricants and speciality chemical products.

[8] The Commission found that the proposed transaction would result in a vertical relationship as Masana would be responsible for the distribution of mining lubricants and speciality products. The Commission is of the view that the vertical relationship identified

would not result in foreclosure concerns as there are no third party distributors that would be foreclosed as a result of the merger because the status quo post-merger remains unchanged. Based on this, the Commission is of the view that the proposed transaction is unlikely to substantially prevent or lessen competition.

[9] The Tribunal accepts the Commission's findings and find that the vertical overlap, does not present any foreclosure concerns. We therefore conclude that the proposed transaction is unlikely to substantially prevent or lessen competition in any market within

South Africa.

Public interest

[10] 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

[11] 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.

18 November 2015

DATE

_________________________

Ms Medi Mokuena

Mr Anton Roskam and Ms Andisa Ndoni concurring

Tribunal Researcher:

Aneesa Ravat

For the merging parties: Anton Roets of Nortons Inc

For the Commission:

Billy Mabatamela, Seema Nunkoo and Xolela Nokele

[1] Inter alia merger record page 8.