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Blue Beacon Investments 190 (Pty) Ltd and Pamodzi Investment Holdings (Pty) Ltd (127/LM/Nov07) [2008] ZACT 8 (23 January 2008)
.RTF of original document
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 127/LM/Nov07
In the matter between:
Blue Beacon Investments 190 (Pty) Ltd
Acquiring Firm
And
Pamodzi Investment Holdings (Pty) Ltd
Target Firm
Panel
: D Lewis (Presiding Member), Y Carrim (Tribunal Member) and M Mokuena (Tribunal Member)
Heard On
: 19 December 2007
Decided on
: 19 December 2007
Reasons Issued on
: 23 January 2008
Reasons for Decision
Approval
[1]
On 19 December 2007 the Competition Tribunal issued a Merger Clearance Certificate approving the
merger between Blue Beacon Investments 190 (Pty) Ltd and Pamodzi Investment Holdings (Pty) Ltd unconditionally. The reasons appear below.
Parties
[2]
The acquiring firm is Blue Beacon Investments 190 (Pty) Ltd (“SPV”) a company incorporated under the laws of the Republic of South Africa. SPV is controlled by Batsalani Industrials (Pty)
Ltd (“Batsalani Industrials”). Batsalani Industrials is a wholly owned subsidiary of Batsalani Holdings (Pty) Ltd (“Batsalani”). [3]
The target firm is Pamodzi Investment Holdings (Pty) Ltd (“PIH”), a company incorporated
under the laws of South Africa. The individual founders of PIH have 55% in PIH.
Transaction
[4]
Batsalani, through SPV intends to acquire 20% of the entire issued share capital of PIH.
Rationale
[5]
Batsalani seeks to leverage its seed capital for higher returns from a diversified BEE portfolio,
and to be a leading shareholder in a fast-growing specialised private equity investor in South Africa, which it hopes to accomplish
through the purchase of a share in PIH. For the target firm the transaction provides an opportunity to increase ownership by women
in PIH. The transaction also provides the target firm with an opportunity to liquidate/convert shares into cash. Lastly it was submitted
that the transaction will result in the re-introduction of equity into PIH lost through the buy-back of shares from certain minority
shareholders.
Parties’ Activities
[6]
Batsalani Industries and SPV are newly formed shelf companies created for purposes of the present transaction. Batsalani has interests in various sectors, including
telecommunications, media and technology, mining/resources, property as well as private equity sectors. Batsalani also has interests
in the information technology sector through a company called Gateway Telecoms (“Gateway”).
[7]
PIH is an investment holding company with interests in various sectors, including food, information technology,
industrial manufacturing, financial services, mining/resources, automotive and leisure industries. PIH’s interests in the information
technology sector are through a company called Namitech.
Competition Analysis
[8]
An examination of the transaction by the Commission revealed that although both the merging parties
have interests in mining, they don’t offer the same/overlapping products within those sectors. According to the Commission,
in mining Batsalani’s interest are in platinum whereas PIH’s are in coal and gold mining. The Commission also considered
the effect of the proposed transaction in the information technology sector and found that the activities of Gateway Telecoms and Namitech do not overlap. Furthermore neither of the merging parties hold controlling interests in these companies. We therefore agree with the Commission
that the proposed transaction is unlikely to substantially prevent or lessen competition. .
Public Interest Issues
[9]
There are no public interest issues.
Conclusion
[10]
Based on the above, we find that the transaction will not result in a substantial lessening or prevention
of competition in the identified markets and is accordingly approved unconditionally.
___________________
23 January 2008
Y Carrim
Date
Tribunal Member
D Lewis and M Mokuena concurring.
Tribunal Researcher
: J Ngobeni
For the merging parties
: Cliffe Dekker Inc
For the Commission
: Ipeleng Selaledi
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