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COMPETITION TRIBUNAL OF SOUTH AFRICA

Case No.: SM1540ct15

In respect of the request for consideration of the conditionally approved merger under the Competition Commission's case number 2015Sep0503 between:

 

Accenture (South Africa) Proprietary Limited                                                    First  Applicant

Accenture Holdings B.V.                                                                                Second Applicant

Edcon Limited                                                                                                    Third Applicant

("The  Acquiring  Firms")

The Consumer Credit and Collection

First Applicant Second Appl icant Third Applicant

Services Joint VenturBs                                                                                Fourth  Applicant

("The Target Firm")

and

The Competition Commission                                                                                 Respondent

Panel                                     : N Manoim (Presiding Member)

                                                     A Roskam (Tribunal Member)

                                                     A Ndoni (Tribunal Member)

Heard on                                : 15 December 2015

Decided on                            : 15 December 2015

Reasons issued on                : 27 January 2016

Reasons for Decision

Approved subject to conditions

[1] On 20 October 2015, the merging parties, namely, Accenture (South Africa) Proprietary Limited ("Accenture SA") , Accenture Holdings B.V. (collectively referred to as the Accenture Group) and Edcon Limited ("Edcon") and the acquiring firm The Consumer Credit and Collection Services Joint Ventures ("Joint  Venture")  filed  an  application  in  terms  of  section  16(1)(a)    of  the Competition Act No. 89 of 1998 requesting the  Competition  Tribunal ("Tribunal") to reconsider their small merger that was approved subject to conditions by the Competition Commission ("Commission") on 6 October 2015.

[2] On  15  December  2015,  the  Competition  Tribunal  ("Tribunal")  conditionally approved the merger between the merging parties for the reasons to follow.

Parties to transaction

Primary acquiring firm

[3] The Accenture Group is a global organization which provides management consulting, technology and outsourcing activities.  In South Africa,  Accenture SA provides advisory services to companies in order to maximise their operating performance by developing and implementing technology to improve productivity and efficiency.

[4] Edcon is a large clothing retailer trading through a range of retail formats  in and around South Africa.

Primary target firm

[5] The target firm is a newly established joint venture which was established to provide consumer credit and collection services to third-party customers locally and abroad. The Joint Venture would provide these  services  to  customers such as banks, fast moving consumer goods such as clothing retailers and other consumer focused companies.

Background

[6] During the Commission's investigation of the proposed transaction it found that there was no horizontal overlap and that the proposed transaction would unlikely  lead to  any  vertical  foreclosure  concerns  post-merger.  Instead,  the Commission's concern intended to address the potential harm of the acquiring firm being used as a conduit for information exchange between Edcon and its competitors in the retail sector as the acquiring firm could provide consumer credit and collection services to competing clothing retailers.

[7] In addressing this harm the Commission proposed that the merger   be approved subject to, amongst others, the following conditions:

"The directors appointed to the board of the Target Firms shall not be appointed, invited and/or attend meeting of the board and/or management committees(s) of Edcon"' and

'The employees, management and executive and  non-executive directors of the Target Firms shall not be involved in Edcon's retail and other operations nor attend any meetings"

[8] The above-mentioned conditions  were communicated to the merging parties during October 2016 and were subsequently approved and a merger certificate was duly issued. The merging parties submitted that the merger was approved prematurely and that the above-mentioned merger conditions would be burdensome for Edcon as it does not have sufficient executive and management  staff available for it to have mutually exclusive boards with the

·    Joint Venture. The merging parties sought to apply to the Tribunal for request for consideration.

[9] Subsequent to the merging party's filing their request for consideration with the Tribunal they suggested alternative conditions to remedy the possibility of information exchange. The conditions include provisions where the merging parties undertake to partition and separate Edcon's retail operations from the Joint Venture, the implementation of Chinese walls to ensure that information is not exchanged and an undertaking that employees and management of the Joint Venture would not be involved in Edcon's retail operations.

[10] These   alternative   conditions   were   acceptable   to   the   Commission   who confirmed this in a letter confirming to the Tribunal. [1]

[11] As the merging parties and the Commission are in agreement on the proposed conditions and  as  no  contrary  facts  were  presented  to  us, the Tribunal grants the consideration subject to the proposed conditions.

27 January 2016

  DATE

_________________________

Mr Norman Manoim

Mr    nton Roskam and Ms Andiswa Ndoni concurring

 

Tribunal Researcher:          Aneesa Ravat

 

For the merging parties:      Chris Charter of Cliffe Dekker Hofmeyr for the first afld second applicants and Graeme Wickins of Vverksmans attorneys for the third applicant

For ttie Commission:            Gilberto Biacuana

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