Sherpa Trade and Invest 51 (Pty) Ltd v Tradebush Investment No 123 (Pty) Ltd (07/LM/Jan08) [2008] ZACT 36 (19 May 2008)
The Tribunal found that there was no overlap in the activities of the merging parties, as the acquiring firm had never traded before and its parent companies operate in banking and private equity, while the target firm is an investment holding company with interests in specialty sweets and related products. The...
Source-derived case information.
- Citation
- [2008] ZACT 36
- Parties
- Applicant: Sherpa Trade and Invest 51 (Pty) Ltd; Respondent: Tradebush Investment No 123 (Pty) Ltd
- Court
- Competition Tribunal
- Jurisdiction
- South Africa
- Case Number
- 07/LM/Jan08
- Procedural Posture
- Merger Approval / Decision on Approval
- Outcome
- Merger approved without conditions.
- Judges
- Y Carrim, M Mokuena, U Bhoola
- Legal Topics
- Merger Control, Public Interest, Substantial Lessening of Competition
Source-derived case record
Summary, issues, holding and outcome
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Parties
Sherpa Trade and Invest 51 (Pty) Ltd
Applicant
Tradebush Investment No 123 (Pty) Ltd
Respondent
Procedural Posture
Merger Approval / Decision on Approval
Legal Issues
- 1 Whether the proposed merger is likely to substantially prevent or lessen competition in the relevant market.
- 2 Whether there are any significant public interest concerns arising from the transaction.
Ratio Decidendi
The Tribunal found that there was no overlap in the activities of the merging parties, as the acquiring firm had never traded before and its parent companies operate in banking and private equity, while the target firm is an investment holding company with interests in specialty sweets and related products. The transaction was therefore unlikely to substantially prevent or lessen competition in any relevant market. Furthermore, no significant public interest issues were identified. Accordingly, the merger was approved without conditions.
Court Disposition
Merger approved without conditions.
Orders
- The merger between Sherpa Trade and Invest 51 (Pty) Ltd and Tradebush Investment No 123 (Pty) Ltd is approved without conditions.
Full Case Text
Judgment text and source record
33 paragraphs
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 07/LM/Jan08
In the matter between:
Sherpa Trade and Invest 51 (Pty) Ltd Acquiring Firm
And
Tradebush Investment No 123 (Pty) Ltd Target Firm
Panel : Y Carrim (Presiding Member), M Mokuena (Tribunal
Member) and U Bhoola (Tribunal Member)
Heard on : 05 March 2008
Order issued on : 05 March 2008
Reasons issued on : 19 May 2008
Reasons for Decision
Approval
On 5 March 2008, the Tribunal approved the merger between Sherpa Trade and Invest 51 (Pty) Ltd and Tradebush Investment No 123 (Pty) Ltd. The reasons for approval follow.
The transaction and parties
The Primary acquiring firm, Sherpa Trade and Invest 51 (Pty) Ltd (âSherpa Tradeâ) is acquiring all the shares in Tradebush
Investment No 123 (Pty) Ltd (âTradebushâ).
The transaction will be implemented via several interrelated steps whereby BoE Private Equity Investments (Pty) Ltd, a subsidiary of Nedbank Group Ltd, and the management shareholders of Tradebush (see below) will subscribe for ordinary shares in Sherpa Trade. Sherpa Trade will then acquire selected businesses of Tradebush. Post the transaction Sherpa Tradeâs shareholders will be BoE, holding 49.9%, Lawrence Davidoff 26.1%, Lawrence Wolman 12.5% and Greg Ginsburg 11.5%. Tradebush will ultimately be controlled by BoE and Davidoff.
Tradebushâs main subsidiary is Sweets from Heaven Holdings which in turn owns several subsidiaries including the Sweets from Heaven franchise. It is controlled by an individual shareholder Mr Lawrence Davidoff, and its remaining shareholders are Lawrence Wolman and Graig Eikensburg.
Rationale for the transaction
Tradebush regards the transaction as an opportunity to realize return on their investment while maintaining a controlling stake in the underlying business of Tradebush while BoE sees it as an attractive private equity investment.
Impact on competition
There is no overlap in the activities of the merging parties. The target firm is an investment holding company which owns Sweets From Heaven Holdings Ltd, a business that mainly sells a variety of speciality and novelty sweets, soft drinks, cigarettes and cell phone airtime. The Acquiring firm has never traded before and its parent companies offer a wide range of banking products that includes private equity investments.
The proposed transaction is thus unlikely to substantially prevent or lessen competition in the relevant product market.
Conclusion
There are no significant public interest issues and we accordingly approve the transaction without conditions.
____________________ 19 May 2008
Y Carrim Date
M Mokuena and U Bhoola concurring.
Tribunal Researcher: R Badenhorst
For the merging parties: Reed Hope Phillips
For the Commission: M Mohlala and H Ratshisusu
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