You are here:
SAFLII >>
Databases >>
South Africa: Competition Tribunal >>
2003 >>
[2003] ZACT 11
[Database Search]
[Name Search]
[Recent Decisions]
[Noteup]
[Help]
Friedshelf 243 (Pty) Ltd and Gillette South Africa (Pty) Ltd (03/LM/Jan03) [2003] ZACT 11 (27 February 2003)
.RTF of original document
COMPETITION TRIBUNAL
REPUBLIC OF SOUTH AFRICA
Case no.: 03/LM/Jan03
In the large merger between:
Friedshelf 243 (Pty) Ltd
and
Gillette South Africa (Pty) Ltd
_______________________________________________________________________
Reasons for Decision
_______________________________________________________________________
Approval
The Competition Tribunal issued a Merger Clearance Certificate on 20 February 2003 approving the merger without conditions. The reasons
are set out below.
The merger
The transaction
Gillette South Africa (Pty) Ltd is selling the manufacturing business of its Eveready Division to Friedshelf 243 (Pty) Ltd as a going
concern.
The parties to the transaction
The acquiring firm is Friedshelf 243 (Pty) Ltd (“Friedshelf”) a special purpose vehicle that currently does not trade
in any products or services. The shareholders of Friedshelf, The Rooibos Trust, BoE Bank Ltd through BoE Investment Partners and
Fenchurch Investment (Pty) Ltd do not currently have a shareholding in any company involved in a similar business to the Eveready
business, nor do they supply any goods or services to the Eveready business. Apart from BOE the other shareholders are investment
vehicles owned by current Eveready management.
The target firm is the Eveready division of Gillette South Africa (Pty) Ltd (“Gillette”). Gillette is a wholly owned subsidiary
of The Gillette Company Inc, registered in the United States of America.
Rationale for the transaction
According to Gillette it decided to shift its strategic global focus to the alkaline batteries segment with the result that its zinc
battery business, the business that Eveready is involved in, does not fit this strategy anymore. Gillette believes that a management
led company with a primary focus on zinc products is more likely to succeed in developing and realising the profit potential of the
zinc battery business in Southern Africa than Gillette with its global focus.
Effect on competition
The Eveready division is involved in the manufacture, distribution, marketing and sale of Zinc Chloride and Zinc Carbon batteries
for South and Southern Africa. Since the acquiring firm is a special purpose vehicle that has never traded there is no product overlap
in either the horizontal or vertical product markets.
The transaction will result in a new player entering the market. Gillette’s market share of 86% in the total battery market
will be eroded after the merger, leaving Gillette with the more expensive Duracell brand. The Eveready brand, which mainly focuses on the middle to lower end of the market, enjoys a market share of 71% and the Duracell
brand a market share of 15%.
Public interest
The transaction will not result in any retrenchments and does not raise any other public interest grounds.
27 February 2003
N. Manoim
Date
Concurring: D. Lewis and U. Bhoola
SAFLII:
|
Terms of Use
|
Feedback
URL: http://www.saflii.org/za/cases/ZACT/2003/11.html
