Tribunal approves SPE Fund and Cavalier Group merger
with significant public interest outcomes

 
The Tribunal has unconditionally approved the large merger whereby SPE Mid-Market I Partnership (“SPE Fund”) will acquire shares in Cavalier Group of Companies (Pty) Ltd (“Cavalier Group”). This transaction, the first investment by a black-owned and managed private equity fund in the feedlots and red meat industry, will significantly advance the promotion of a greater spread of ownership by historically disadvantaged persons (HDPs), in line with section 12(A)(3)(e) of the Competition Act.
 
In considering the proposed merger, the Tribunal heard submissions from the Competition Commission as well as the merger parties. The Tribunal also took into account submissions by the Department of Trade, Industry and Competition on the impact of the transaction on a greater spread of ownership, as well as the Public Investment Corporation’s shareholding in competitors of the target firm.
 
The merger parties
 
SPE Fund is a newly created and black-managed private equity fund that does not have any previous business activities or operations. SPE Fund is ultimately controlled by Sanlam Life Insurance Ltd, acting through its Sanlam Private Equity division. Sanlam Life Insurance is, in turn, wholly owned and controlled by Sanlam Ltd, a public company listed on the JSE.
 
Cavalier Group is a private company. It is a meat producer trading in the procurement, packaging, sale and distribution of red meat and related products. It has a lamb feedlot and a processing, deboning and packaging plant as well as a beef abattoir.
 
Cavalier Group operates in a sector of the South African economy that is characterised by low levels of transformation. Post-merger, it will be jointly controlled by a black-owned Fund manager, SPE Fund, and the transaction will substantially increase the levels of ownership by HDPs in the Cavalier Group.
 
The Tribunal found that the proposed transaction does not raise any competition or public interest concerns.

Tribunal approves merger whereby RMBIA and Redefine acquire
Mall of the South

 
The Tribunal has approved the proposed merger whereby RMB Investments and Advisory Proprietary Limited (“RMBIA”) and Redefine Properties Limited (“Redefine”) will acquire the property letting enterprise known as Mall of the South from the trustees for the time being of Truzen 89 Trust through a special purpose vehicle, namely Propco SPV.
 
RMBIA is a private company controlled by FirstRand Investment Holdings Limited. It is an investment company, and its main business is the acquisition and holding of assets for investment purposes.
 
Redefine is a South African based Real Estate Investment Trust (“REIT”) listed on the JSE in the “diversified REITS” sector. Its property portfolio comprises a diverse range of properties i.e. office, retail, residential and industrial space throughout South Africa.
 
The target property known as the Mall of the South in Gauteng will be acquired by the acquiring firms through an SPV.
 
The Tribunal found that the proposed transaction does not raise any competition or public interest concerns and has, therefore, approved the merger without conditions.