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Umlingo Trade and Invest 71 (Pty) Ltd v Mining Capital Equipment Business, A Division of Longyear S.A (Pty) Ltd (08/LM/Jan08) [2008] ZACT 21 (7 April 2008)
.RTF of original document
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case NO: 08/LM/Jan08
In the matter between
Umlingo Trade and Invest 71 (Pty) Ltd
Primary Acquiring
firm
And
Mining Capital Equipment Business,
A Division of Longyear S.A (Pty) Ltd
Primary
Target Firm
Panel
: Y Carrim (Tribunal Member); M Mokuena (Tribunal Member); and U Bhoola (Tribunal Member)
Heard on
: 05 March 2008
Decided on
: 05 March 2008
Reasons Issued
: 07 April 2008
Reasons for Decision
Approval
[1]
On 5 March 2008 the Competition Tribunal issued a Merger Clearance Certificate approving the merger between Umlingo Trade and Invest 71 (Pty) Ltd and Mining Capital Equipment Business, a Division of Longyear S.A. (Pty) Ltd unconditionally. The reasons appear below.
Parties
[2]
The primary acquiring firm is Umlingo Trade and Invest 71 (Pty) Ltd (“Umlingo”), a company incorporated under the laws of the Republic of South Africa. Umlingo is jointly controlled by BoE
Private Equity Investments (Pty) Ltd (“BoE Private Equity”) and Cast Arena Trade and Invest 98 (Pty) Ltd (“Cast Arena”).
[3]
The primary target firm is Mining Capital Equipment Business (“MCE Business”), a division of Longyear S.A. (Pty) Ltd (“Longyear SA”). Longyear SA is a company incorporated under the laws of the Republic of South Africa.
Transaction
[4]
In terms of the proposed transaction Umlingo intends to acquire MCE business from Longyear, as a
going concern. The transaction will result in Umlingo having control over the MCE Business.
Rationale for the Transaction
[5]
From the acquiring firm’s perspective the proposed transaction represents an attractive opportunity
for BoE Private Equity, an investment company used by Nedbank Capital Private Equity for its investments.
[6]
Longyear SA is seeking to dispose of non-core operations such as the MCE Business
Parties Activities
[7]
Umlingo is a newly established company and does not have any business activities. The Nedbank Group
operates as a banking and financial service provider. MCE Business is involved in the mining equipment business and its activities entails the manufacture, marketing and distribution
of hydraulic rockdrills, drilling rigs, Load Haul Dump (“LHD”) machines, utility vehicles and special purpose vehicles
for underground hard rock mining which are all manufactured in South Africa.
Competition Analysis
[8]
According to the Commission there is no overlap in the activities of the merging firms as the acquiring
firm does not have interests in the manufacturing and distribution of mining equipment where the target firm is active. We therefore
agree with the Commission that the proposed transaction is unlikely to substantially prevent or lessen competition. There are no
public interest issues.
Conclusion
[9]
Based on the above the transaction will not result in a substantial lessening or prevention of competition
in the identified markets and is accordingly approved unconditionally.
___________________
07 April 2008
Y Carrim
Date
Tribunal Member
M Mokuena and U Bhoola concurring
Tribunal Researcher
: J Ngobeni.
For the merging parties
: Bowman Gilfillan
For the Commission
: Themba Mahlangu
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