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MICROS South Africa (Pty) Ltd and Miros-Fidelio South Africa (Pty) Ltd & Others (115/LM/NOV07) [2008] ZACT 4 (15 January 2008)
.RTF of original document
IN THE COMPETITION TRIBUNAL
CASE NO. 115/LM/NOV07
In the matter between:
MICROS South Africa (PTY) LTD
Acquiring firm
And
MICROS-FIDELIO SOUTH AFRICA (PTY) LTD
COMPUTER LODGING SYSTEMS (PTY) LIMITED
MICROS SPECIALIZED SOLUTIONS (PTY) LTD Target firms
______________________________________________________________________
Panel
: DH Lewis (Presiding Member), Y Carrim (Tribunal Member), M Mokuena (Tribunal Member)
Heard on
: 19 December 2007
Order issued on
: 19 December 2007
Reasons issued on
: 15 January 2008
REASONS FOR DECISION
APPROVAL
[1]
On 19 December 2007 the Tribunal unconditionally approved the merger between Micros South Africa
(Pty) Limited and Micros-Fidelio South Africa (Pty) Limited, Computer Lodging Systems (Pty) Limited, and Micros Specialized Solutions
(Pty) Ltd. The reasons for approval follow:
PARTIES TO THE TRANSACTION
[2]
The primary acquiring firm is Micros South Africa (Pty) Limited (“Micros SA”), a newly
formed company which has not traded. Micros SA’s shareholders and their respective shareholding is as follows: 1) Management
has 51%; 2) Safika Investment (Pty) Ltd, a Black Economic Empowerment (BEE) company has 26%; and 3) Corvest 6 (Pty) Ltd (“Corvest 6”) has 23%. In terms of the control structure, Micros SA will be negatively controlled by Safika Investments
and Corvest 6, as a result of minority provisions conferred on these firms the draft shareholders agreement for Micros SA.
[3]
There are three primary target firms namely, Micros-Fidelio South Africa (Pty) Limited (“Micros”), Computer Lodging Systems (Pty) Limited (“CLS”) and Micros Specialized Solutions (Pty) Ltd (“MSS”).
THE TRANSACTION
[4]
Micros SA intends to purchase the businesses of Micros, CLS and MSS as going concerns. As a result
of the transaction Micros SA will own the businesses of Micros, CLS and MSS. The rationale for this transaction is to empower the
businesses of the target firms by introducing Safika Investments, a BEE company.
ACTIVITIES OF THE MERGING PARTIES
[5]
FirstRand Limited, the ultimate controller of Micros SA, has interests in the provision of a variety
of banking services, including, retail banking, installment credit finance and merchant banking.
[6]
Micros and CLS have interests in information management solutions, including software, hardware enterprise
system integration to the restaurants, hotels, and leisure and entertainment industries. Safika Holdings holds a 40% stake in African
Resonance Business Solutions (Proprietary) Limited which is active in the supply of point-of-sale terminals, related software and
payment solutions, focusing on the retail and banking sectors. MSS has interests in the provision of handheld, portable transactional
technology and software used by Fast Moving Consumer Goods multinationals, supply chain, logistics and related industries for rapid
data capturing and decision making at point of transaction.
[7]
From the information provided by the merging parties it was unclear whether or not there was an overlap
in the point of sale software and hardware products supplied by Micros and African Resonance. At the hearing the merging parties
clarified Micros’ products are specifically tailored to the restaurants, hotels and leisure, and entertainment industries,
whilst African Resonance products are specifically tailored for the retail and banking sectors. Moreover, Micros and African Resonance
products are not substitutable as they use different technology and perform different key functions.
COMPETITION EVALUATION
[8]
This transaction has no negative competition effects as there is no overlap in the activities of
the merging parties. There is no vertical integration and no horizontal concerns arise. Furthermore, there are no negative effects
on employment and no significant public interest issues to be concerned about.
CONCLUSION
[9]
We find that this transaction is unlikely to substantially lessen or prevent competition, and accordingly
approve the merger unconditionally.
_______________
15 January 2008
Y Carrim
Date
Tribunal Member
D Lewis and M Mokuena concur in the judgment of Y Carrim
Tribunal Researcher: L Xaba
For the merging parties
:
Cliffe Dekker
For the Commission
:
M Mohlala
(Mergers & Acquisitions)
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