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Johannesburg - The Competition Tribunal will on Wednesday hear six matters.
The first of which will be the acquisition by consumer goods distributor Massmart Holdings [JSE:MSM] of the Fruitspot Group.
The acquirer in this deal is Opiconsivia Trading, a wholly-owned subsidiary of Makro, a subsidiary of Massmart. Massmart is held 51% by Wal-Mart.
The targets of this deal are The Fruit Shop, The Fruit Spot and The Fruit Express, together referred to as Fruitspot.
Fruitspot is a wholesaler, processor and distributor of fresh fruit and vegetables to customers mainly in the hospitality and retail segments of industry.
Through this transaction, Makro intends to expand its fresh produce offering.
The Competition Commission assessed the proposed deal and found that it could result in a lessening of competition.
In particular, the commission was concerned about the possibility that, after the merger, Makro could reduce fresh produce supplies or increase prices to existing retail customers of Fruitspot that potentially compete with Makro, in an effort to make them less competitive.
The commission therefore recommended that the Competition Tribunal approve this merger subject to the condition that Fruitspot continue supplying its customers, on the same basis as before the merger, for a period of two years. The commission believes that this will allow Fruitspot customers enough time to secure alternative sources of supply.
The tribunal will also hear the merger between Masscash and Rhino. The acquiring firm in this transaction is Mystic Blue, a wholly-owned subsidiary of Masscash Retail, which is ultimately controlled by Wal-Mart.
Through this deal, Mystic Blue intends to acquire 16 Rhino stores mostly based in KwaZulu-Natal and the Eastern Cape. When the deal is complete, Masscash retail will have sole control over the Rhino Group.
Both parties to this deal operate in the wholesale and retail of grocery and liquor products however Rhino stores is mainly involved in the retail of groceries and liquor to low income customers.
Masscash stores, on the other hand, are generally classified as wholesalers and sell their grocery products through CBW, Jumbo and Makro.
The Masscash division also comprises retail and hybrid outlets such as Cambridge, Buy-Rite and Saverite, which also sell groceries, liquor and general merchandise to lower income customers.
The Competition Commission assessed this merger and concluded that certain of the markets that will be affected by the merger, in particular the Nongoma and Matatiele areas, are highly concentrated and so the merger could give rise to significant competition concerns if it goes ahead unconditionally.
Consequently, the commission recommended that the tribunal approve the deal on condition that the merging parties sell-off the Rhino stores in Nongoma and in Matatiele to independent third parties with sufficient scale to withstand the competitive pressures in these areas.
Also on Wednesday, the tribunal will hear the merger between GEPF, Pareto and Business Venture Investments.
The acquiring firm in this deal is the Government Employee Pension Fund (GEPF), a defined benefit pension fund, whose core function is to manage and administer pensions and other benefits for government employees in SA.
Here the GEPF is represented by the Public Investment Corporation (PIC) who invests funds on behalf of public sector entities like the GEPF and also manages a number of properties, which provide office, retail and industrial rental space.
Pareto and BVI are the target firms in the merger. Pareto's main business activity involves acquiring and developing major retail centres in SA.
BVI is a private company formed as a vehicle to hold additional property investments outside the Pareto structure.
The Competition Commission assessed this merger and concluded that it was unlikely to raise significant competition concerns, and therefore recommended that the tribunal approve the transaction without conditions.
The tribunal will also hear the merger between Hitachi and Shoden.
In this transaction Hitachi Data Systems Europe Holdings, a subsidiary of American based Hitachi Data Systems, intends to acquire Shoden Data Systems.
Through its various South African subsidiaries, Hitachi Data Systems operates in the sale and distribution of mining, earthmoving and forestry equipment as well as the production of fossil-fired power plants and gas turbines.
The acquiring firm in this deal, Hitachi Data Systems Europe Holdings, supplies data storage solutions and software into SA through its sole agent, Shoden Data Systems.
After assessing this transaction, the Competition Commission concluded that it was unlikely to substantially lessen or prevent competition in the market, and recommended that the tribunal approve the deal without conditions.
The tribunal will also hear the merger between Stefanutti Stocks and Cycad Pipelines.
The merger between Stefanutti and Cycad occurs through various steps resulting in Stefanutti gaining control of Cycad.
Stefanutti is a multidisciplinary construction company that provides a wide range of construction-related services including the construction of fixed infrastructure, municipal services, industrial facilities, as well as all structures and buildings. Cycad operates in the pipeline construction market.
It also undertakes civil and minor mechanical work in respect of its pipeline activities.
In its assessment of the transaction, the Competition Commission found that the merger was unlikely to substantially lessen competition and therefore recommended that the Competition Tribunal unconditionally approve the deal.
Lastly, the tribunal will hear the settlement agreement between the Competition Commission and Apollo Tyres.
The Competition Commission entered into a settlement agreement with Apollo Tyres SA, formerly Dunlop, in which Apollo admits that it took part in the tyre manufacturers' cartel.
The cartel involved the main tyre manufacturers in agreeing on pricing and price increases, known amongst them as "coffee table talks".
Apollo Tyres has agreed to pay a penalty of R45 million which represents 4.75% of its 2008 total turnover and admits that it was involved in price fixing conduct.
The tribunal may confirm the settlement, refuse to confirm it or require that amendments be made to the settlement before confirming it.
The first of which will be the acquisition by consumer goods distributor Massmart Holdings [JSE:MSM] of the Fruitspot Group.
The acquirer in this deal is Opiconsivia Trading, a wholly-owned subsidiary of Makro, a subsidiary of Massmart. Massmart is held 51% by Wal-Mart.
The targets of this deal are The Fruit Shop, The Fruit Spot and The Fruit Express, together referred to as Fruitspot.
Fruitspot is a wholesaler, processor and distributor of fresh fruit and vegetables to customers mainly in the hospitality and retail segments of industry.
Through this transaction, Makro intends to expand its fresh produce offering.
The Competition Commission assessed the proposed deal and found that it could result in a lessening of competition.
In particular, the commission was concerned about the possibility that, after the merger, Makro could reduce fresh produce supplies or increase prices to existing retail customers of Fruitspot that potentially compete with Makro, in an effort to make them less competitive.
The commission therefore recommended that the Competition Tribunal approve this merger subject to the condition that Fruitspot continue supplying its customers, on the same basis as before the merger, for a period of two years. The commission believes that this will allow Fruitspot customers enough time to secure alternative sources of supply.
The tribunal will also hear the merger between Masscash and Rhino. The acquiring firm in this transaction is Mystic Blue, a wholly-owned subsidiary of Masscash Retail, which is ultimately controlled by Wal-Mart.
Through this deal, Mystic Blue intends to acquire 16 Rhino stores mostly based in KwaZulu-Natal and the Eastern Cape. When the deal is complete, Masscash retail will have sole control over the Rhino Group.
Both parties to this deal operate in the wholesale and retail of grocery and liquor products however Rhino stores is mainly involved in the retail of groceries and liquor to low income customers.
Masscash stores, on the other hand, are generally classified as wholesalers and sell their grocery products through CBW, Jumbo and Makro.
The Masscash division also comprises retail and hybrid outlets such as Cambridge, Buy-Rite and Saverite, which also sell groceries, liquor and general merchandise to lower income customers.
The Competition Commission assessed this merger and concluded that certain of the markets that will be affected by the merger, in particular the Nongoma and Matatiele areas, are highly concentrated and so the merger could give rise to significant competition concerns if it goes ahead unconditionally.
Consequently, the commission recommended that the tribunal approve the deal on condition that the merging parties sell-off the Rhino stores in Nongoma and in Matatiele to independent third parties with sufficient scale to withstand the competitive pressures in these areas.
Also on Wednesday, the tribunal will hear the merger between GEPF, Pareto and Business Venture Investments.
The acquiring firm in this deal is the Government Employee Pension Fund (GEPF), a defined benefit pension fund, whose core function is to manage and administer pensions and other benefits for government employees in SA.
Here the GEPF is represented by the Public Investment Corporation (PIC) who invests funds on behalf of public sector entities like the GEPF and also manages a number of properties, which provide office, retail and industrial rental space.
Pareto and BVI are the target firms in the merger. Pareto's main business activity involves acquiring and developing major retail centres in SA.
BVI is a private company formed as a vehicle to hold additional property investments outside the Pareto structure.
The Competition Commission assessed this merger and concluded that it was unlikely to raise significant competition concerns, and therefore recommended that the tribunal approve the transaction without conditions.
The tribunal will also hear the merger between Hitachi and Shoden.
In this transaction Hitachi Data Systems Europe Holdings, a subsidiary of American based Hitachi Data Systems, intends to acquire Shoden Data Systems.
Through its various South African subsidiaries, Hitachi Data Systems operates in the sale and distribution of mining, earthmoving and forestry equipment as well as the production of fossil-fired power plants and gas turbines.
The acquiring firm in this deal, Hitachi Data Systems Europe Holdings, supplies data storage solutions and software into SA through its sole agent, Shoden Data Systems.
After assessing this transaction, the Competition Commission concluded that it was unlikely to substantially lessen or prevent competition in the market, and recommended that the tribunal approve the deal without conditions.
The tribunal will also hear the merger between Stefanutti Stocks and Cycad Pipelines.
The merger between Stefanutti and Cycad occurs through various steps resulting in Stefanutti gaining control of Cycad.
Stefanutti is a multidisciplinary construction company that provides a wide range of construction-related services including the construction of fixed infrastructure, municipal services, industrial facilities, as well as all structures and buildings. Cycad operates in the pipeline construction market.
It also undertakes civil and minor mechanical work in respect of its pipeline activities.
In its assessment of the transaction, the Competition Commission found that the merger was unlikely to substantially lessen competition and therefore recommended that the Competition Tribunal unconditionally approve the deal.
Lastly, the tribunal will hear the settlement agreement between the Competition Commission and Apollo Tyres.
The Competition Commission entered into a settlement agreement with Apollo Tyres SA, formerly Dunlop, in which Apollo admits that it took part in the tyre manufacturers' cartel.
The cartel involved the main tyre manufacturers in agreeing on pricing and price increases, known amongst them as "coffee table talks".
Apollo Tyres has agreed to pay a penalty of R45 million which represents 4.75% of its 2008 total turnover and admits that it was involved in price fixing conduct.
The tribunal may confirm the settlement, refuse to confirm it or require that amendments be made to the settlement before confirming it.
