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COMPETITION TRIBUNAL OF SOUTH AFRICA

Case No: LM1570ct15

In the matter between:

BARLOWORLD TRANSPORT (PTY) LTD                                           Primary Acquiring Firm

and

ASPEN LOGISTIC SERVICES (PTY) LTD                                                Primary Target Firm

Panel                                        : Norman Manoim (Presiding Member)

                                                      : Anton Roskam (Tribunal Member)

                                                      : Andiswa Ndoni (Tribunal Member)

Heard on                                   : 15 December 2015

Order Issued on                       : 15 December 2015

Reasons Issued on                  : 22 December 2015

Reasons for Decision

Approval

[1] On 15 December 2015, the Competition Tribunal ("Tribunal") approved the proposed transaction between Barloworld Transport (Pty) Ltd and Aspen Logistic Services (Ply} Ltd.

[2] The reasons for approving the proposed transaction follow.

Parties to proposed transaction

Primary acquiring firm

[3] The primary acquiring firm is Barloworld Transport (Ply) Ltd ("BWT")  a  private company incorporated in the Republic of South Africa. It is a logistics group and maintains a controlling interest in a number of transport companies in South Africa.

[4] The range of services offered by the BWT Group are extensive and include line-haul transport services; dedicated transport services; warehousing and distribution services; abnormal transport services; fuel, gas and chemical transport services; and timber and cane transport services.

[5] BWT recently acquired KLL Group (Pty) Ltd which has resulted in a minor overlap with the activities of the target firm. KLL Group currently conducts business as a multi-temperature food distributor in South Africa.

Primary target firm

[6] The  primary target firm is Aspen Logistics Services (Pty) Ltd ("Aspen"), a road transport and logistics company involved in the transportation of temperature controlled fast-moving consumer goods in South Africa and neighboring countries.

Proposed transaction and rationale

[7] BWT intends to acquire a controlling interest of 51% in Aspen. Following which BWT will have sole control over Aspen.

[8] BWT submits that the proposed transaction will allow it to enter into the market for temperature controlled distribution services and augment its current product offering.

[9] Aspen submits that the proposed transaction presents an opportunity for Aspen's shareholders and employees to be part of a larger group, with a broader product offering and access to a larger customer base.

Impact on competition

[10] The Competition Commission ("Commission") submits that  there  is  no  horizontal overlap in the activities of BWT and Aspen. However, the Commission did identify a minor overlap with regards to the activities of the KLL Group and Aspen in the market for temperature controlled distribution services.

[11] The  Commission  found that the  market share accretion within the  relevant  market was negligible. The merging parties are relatively small players in the market and would continue to be constrained by market leaders such as Imperial Cold Logistics (Pty) Ltd, Vector Logistics Ltd, Clover S.A (Ply) Ltd, Hestony Transport (Ply) Ltd, Unitrans Supply Chain Solutions (Ply) Ltd and Leiben Logistics (Pty) Ltd.

[12] The  Commission  therefore  concluded  that  the  proposed  transaction  is  unlikely  to substantially prevent or lessen competition in any relevant market.

[13] We  concur  with  the  Commission's   conclusion  that  the  proposed  transaction   is unlikely to substantially prevent or lessen competition in any relevant market.

Public interest

[14] The  merging parties confirmed  that  the  proposed transaction  will  not  result  in any adverse impact on employment. [1]

[15] The proposed transaction further raises no other public interest concerns.

Conclusion

[16] In light of the above, we conclude that the proposed transaction is unlikely to substantially prevent  or lessen competition in any relevant market. In addition, no public interest issues arise from the proposed transaction. Accordingly, we approve the proposed transaction unconditionally.

22 December 2015

DATE

_______________________

Mr Norman Manoim

Mr Anton Roskam and Ms Andiswa Ndoni concurring

 

Tribunal Researcher:              Karissa Moothoo Padayachie

For the merging parties:          Bowman Gilfillan

For the Commission:               Nolubabalo Myoli

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