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COMPETITION TRIBUNAL OF SOUTH AFRICA

Case NO: 15/LM/Feb08

In the matter between

Main Street 615 (Pty) Ltd Primary Acquiring firm

And

Tiger Automotive Ltd Primary Target Firm

Panel : N Manoim (Tribunal Member); Y Carrim (Tribunal Member) and L Reyburn (Tribunal Member)

Heard on : 13 February 2008

Decided on : 13 February 2008

Reasons Issued : 20 February 2008

Reasons for Decision

Approval

[1] On 13 February 2008 the Competition Tribunal issued a Merger Clearance Certificate approving the merger between Main Street 615 (Pty) Ltd and Tiger Automotive Ltd unconditionally. The reasons appear below.

Parties

[2] The primary acquiring firm is Main Street 615 (Pty) Ltd (“Bidco”), a company incorporated under the laws of the Republic of South Africa. Bidco is a special purpose vehicle created specifically by Ethos Private Equity Fund V (“Ethos Fund V”).¹ Ethos Fund V is controlled by Ethos Private Equity Fund (“Ethos”).²

[3] The primary target firm is Tiger Automotive Ltd (“TiAuto”), a company incorporated under the laws of the Republic of South Africa.³ Tiger Wheel & Tyre (Pty) Ltd (“Tiger Wheel”) and Yokohama Southern Africa (Pty) Ltd (“Yokohama”) are TiAuto’s active subsidiaries.

Transaction

[4] In terms of the proposed transaction Ethos Fund V, acting through Bidco intends to acquire the entire issued capital in TiAuto. The proposed transaction will be implemented by way of a scheme of arrangement in terms of section 311 of the Companies Act No.61 of 1973.

Rationale for the Transaction

[5] The parties submitted that the transaction facilitates an additional opportunity for Ethos Fund V and will enable it to expand its current portfolio of investments. According to the parties the objective of Ethos Fund V is to realise a capital return on its portfolio companies.

[6] From the target firm’s perspective, the underlying Scheme will provide TiAuto shareholders with an opportunity to realise significant value of their investment.

Parties Activities

[7] Bidco is a special purpose vehicle created by Ethos to acquire the entire issued share capital of TiAuto. Ethos is a private equity fund manager that directly or through its subsidiaries, organises and administers private equity investment funds on behalf of institutional and private investors.⁴ TiAuto is primarily involved in the retail and wholesale trading of passenger car tyres and aftermarket alloy wheels through Tiger Wheel and Yokohama.

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 wholesale and retail trading of passenger car tyres, alloy wheel and related products. At the hearing we were informed that although MotoQuip (a division of Brandcorp) is involved in motor accessories such as jumping cables and car mats, it does not distribute any products which are distributed by TiAuto or its subsidiaries.

Conclusion

[9] Based on the above the transaction is unlikely to result in a substantial lessening or prevention of competition. In addition, there are no public interest issues. It is therefore approved unconditionally.

___________________ 20February 2008

Y Carrim Date

Tribunal Member

N Manoim and L Reyburn concurring.

Tribunal Researcher : J Ngobeni.

For the merging parties : Webber Wentzel Bowens

For the Commission : Makgale Mohlala

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