TP Hentiq 6132 (Pty) Ltd v Sectional Poles Business Division of Harrison & White Investments (Pty) Ltd (16220) [2013] ZACT 22 (5 April 2013)
- Citation
- [2013] ZACT 22
- Status
- Judgment
- Jurisdiction
- South Africa
- Court
- Competition Tribunal
- Panel
- Norman Manoim, Andreas Wessels, Medi Mokuena
- Case number
- 016220
More details
- Court
- Competition Tribunal
- Panel
- Norman Manoim, Andreas Wessels, Medi Mokuena
- Case number
- 016220
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 the activities of the acquiring group and the target firm, as the acquiring group does not provide products or services similar to those of the target. The transaction is therefore unlikely to substantially prevent or lessen competition. Furthermore, the merging parties submitted that the transaction would not result in any job losses, and thus there are no adverse public interest effects. The Tribunal concluded that the transaction meets the requirements for unconditional approval under the Competition Act.
Court disposition
The merger is approved unconditionally.
Orders
- The proposed transaction is approved without conditions.
02
Material facts
Parties
TP Hentiq 6132 (Pty) Ltd
Applicant Counsel: Kayley De Oliveira and Natalie von EySectional Poles Business Division of Harrison & White Investments (Pty) Ltd
Respondent03
Procedural history
Posture
Merger Approval / Reasons for Decision
04
Questions and positions
Legal issues
- 01
Whether the proposed acquisition by TP Hentiq 6132 (Pty) Ltd of Sectional Poles constitutes a notifiable merger under the Competition Act.
- 02
Whether the transaction raises any competition concerns, including horizontal overlap between the parties.
- 03
Whether the transaction has any adverse public interest effects, including job losses.
Party arguments
- Applicant
- The applicant argued that the transaction is an attractive private equity investment opportunity and that there is no overlap between the activities of the acquiring and target firms. The transaction is not expected to result in any job losses or negative public interest effects.
- Respondent
- The respondent submitted that the sale is part of a strategy to reduce its debt burden in light of the economic downturn. The respondent concurred that the transaction would not negatively affect competition or public interest.
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
The absence of horizontal overlap between merging parties is a key factor in assessing competition effects.
06
Ratio, limits and disposition
Ratio decidendi
The Tribunal found that there is no horizontal overlap between the activities of the acquiring group and the target firm, as the acquiring group does not provide products or services similar to those of the target. The transaction is therefore unlikely to substantially prevent or lessen competition. Furthermore, the merging parties submitted that the transaction would not result in any job losses, and thus there are no adverse public interest effects. The Tribunal concluded that the transaction meets the requirements for unconditional approval under the Competition Act.
Obiter and limits
- The Tribunal noted that private equity investment opportunities can contribute positively to the economy when they do not raise competition or public interest concerns.
- The Tribunal acknowledged the respondent's rationale of debt reduction as a legitimate business strategy in the current economic climate.
Court disposition
The merger is approved unconditionally.
- The proposed transaction 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: 016220
In the matter between:
TP Hentiq 6132 (Pty) Ltd ..........................................................................Acquiring Firm
And
Sectional Poles Business Division of
Harrison & White Investments (Pty) Ltd ...............................................Target Firm
Panel : Norman Manoim (Presiding Member)
Andreas Wessels (Tribunal Member)
Medi Mokuena (Tribunal Member)
Heard on : 13 March 2013
Order issued on : 14 March 2013
Reasons issued on : 05 April 2013
Reasons for Decision
Approval
On 14 March 2013 the Competition Tribunal (the “Tribunal”) unconditionally approved the acquisition by TP Hentiq 6132 (Pty) Ltd (“Newco”) of the business division of Harrison & White Investments (Pty) Ltd (“H&W”), namely, Sectional Poles (“Sectional Poles”).
The reasons for the approval of the transaction follow below.
Parties and their activities
The primary acquiring is Newco, a firm incorporated in terms of the laws of the Republic of South Africa. Newco is controlled by Corvest 7 (Pty) Ltd (“Corvest”), which is in turn controlled by RMB Corvest (Pty) Ltd (“RMB Corvest”).1 RMB Corvest is controlled by FirstRand Investment Holdings Ltd (“FirstRand Investment”), which is ultimately controlled by FirstRand Ltd (“FirstRand”).
Newco is a newly incorporated entity and as such does not provide any products and/or services. Corvest is the investment arm of RMB Corvest and was established to hold shares and acquire investments. It has interests in firms that operate across a broad range of categories including industrial, services, retail and consumer, health care and finance. FirstRand is an integrated financial services group that is active in retail banking, investment banking, corporate banking, private banking, life insurance, health insurance, asset management, employee benefits and short-term insurance.
The primary target firm is Sectional Poles, a wholly owned business division of H&W. Sectional Poles is involved in designing, manufacturing and supplying masts, poles and towers to the lighting and the telecommunications industries.
Proposed transaction
In terms of the proposed transaction Newco intends to acquire Sectional Poles from H&W as a going concern. On completion of the transaction Newco will have sole control over Sectional Poles.
Rationale for the transaction
Corvest’s rationale is that this transaction presents an attractive private equity investment opportunity, from which potentially attractive returns might result.
H&W submitted that this transaction is part of its strategy to inter alia, reduce its debt burden in light of the economic downturn.
Effect on competition
There is no horizontal overlap between the activities of the merging parties as the acquiring group does not provide any products or services that are similar to those provided by the target firm.
Public interest
The merging parties submitted that the proposed transaction will not result in any job losses and as a result will have no impact on public interest.2
Conclusion
We approve the proposed transaction unconditionally.
____ 05 April 2013
Norman Manoim Date
Andreas Wessels and Medi Mokuena concurring
Tribunal researcher: Ipeleng Selaledi
For the merging parties: Kayley De Oliveira and Natalie von Ey of Cliffe Dekker Hofmeyr
For the Commission: Portia Bele
1RMB Corvest holds 66.7% in Corvest 100 (Pty) Ltd (“Corvest 100”). Corvest 100 holds preference shares in Shalamuka Fund Manager (Pty) Ltd (“Shalamuka Fund”), entitling it to 48.98% of the economic interest in Shalamuka Fund. Shalamuka Fund owns shares in Shalamuka Capital (Pty) Ltd (“Shalamuka Capital”) that entitles it to 50.26% of the economic benefits of Shalamuka Capital, with the balance owned by Corvest 100 through a preference share structure. Shalamuka Capital holds 22% of the shares in Newco and as RMB Corvest controls Shalamuka Capital by virtue of the shareholders agreement, RMB Corvest is the ultimate controller of Newco.
2See form CC4 (1) on page 8 of the record.
5
Case-aware research
Ask AI about this case
The judgment and available research above are public. New questions open in a separate private conversation grounded in this case.