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Tribunal unconditionally approves merger involving
Northam Platinum Holdings Limited and Northam Platinum Limited
The Tribunal has unconditionally approved the large merger whereby Northam Platinum Holdings Limited (“Northam Holdings”) will acquire Northam Platinum Limited’s ("Northam") Offer Shares through a scheme of arrangement including a share-for-share transaction. Post-merger, Northam will become a subsidiary of Northam Holdings. As such, the transaction is a restructuring.
The primary acquiring firm is Northam Holdings, a newly incorporated entity currently wholly controlled by Northam, the target firm. Northam is a primary producer of platinum, palladium and rhodium as well as gold.
As the transaction is merely a restructuring, Northam will continue its activities in South Africa as it had done prior to the transaction.
The Tribunal has concluded that the merger is unlikely to substantially prevent or lessen competition in any market in South Africa.
In regard to public interest considerations and the spread of ownership in particular, the merger increases ownership by historically disadvantaged persons (“HDPs”), as it results in an increase in the shares of Northam held by HDPs. In addition, the transaction is unlikely to have a negative impact on existing social labour plans i.e., the ability of Northam to deliver on its social labour plan objectives. The transaction does not raise any other public interest concerns.
Tribunal confirms settlement agreement whereby firms agree to pay
R1 million fine for failing to notify a merger
The Tribunal has confirmed a settlement agreement wherein ETG Agro Products (Pty) Ltd (“ETG”) and Rand Agri (Pty) Ltd (“Rand Agri”) admit that they entered into a merger transaction in 2013 without notifying the Competition Commission (“the Commission”) at the time.
The firms acknowledge that they contravened the Competition Act (“the Act”) and have agreed that they are jointly and severally liable to pay an administrative penalty (a fine) of R1 000 000 (one million Rand).
Among others, ETG and Rand Agri also agree to develop, implement and monitor a competition law compliance programme incorporating corporate governance, to ensure that their employees, management, directors and agents do not contravene the Act in future.
In December 2018, the Commission received information from the respondents of an intermediate merger whereby ETG self-reported that in May 2013, it acquired and implemented control over Rand Agri, then known as Maize and More (Pty) Ltd without notifying the merger to Commission, as required by section 13A of the Act.
In assessing the transaction after notification, the Commission found that the merger did not raise any competition or public interest concerns. However, it found that the firms had contravened the Act by not notifying the merger and sought an administrative penalty against the firms.
Tribunal confirms settlement agreement between Commission and Premier FMCG relating to wheat and maize milling cartels
The Tribunal has confirmed a settlement agreement between the Commission and Premier FMCG (Pty) Ltd (“Premier”) relating to collusion in the wheat and maize milling industries during the period 1999 to 2007.
In terms of the settlement agreement, Premier has committed to competitive pricing and has given an undertaking that it will not be involved in any form of prohibited conduct. The firm has also developed, implemented and is monitoring a competition law compliance programme. Premier has not been required to pay an administrative penalty (a fine) as it was the leniency applicant that applied for immunity under the Commission’s corporate leniency programme and it whistle-blew on the cartel.
Background
In 2007, the Commission launched an investigation into Premier and others for their alleged involvement in the bread manufacturer’s cartel that fixed prices and divided markets in the Western Cape. In October 2009, the Commission expanded its investigation in relation to the wheat and maize milling cartels.
Wheat milling
The Commission concluded from its investigation that during 1999 to 2007 Premier and others were involved in unlawful activities in the wheat milling market i.e., they directly fixed the selling price of milled wheat products, agreed on dates to implement price increases and allocated customers to themselves. The Commission also found that they used meetings and telephone calls to secure ongoing price fixing arrangements, agreements on trading terms and market sharing arrangements. The aforementioned agreements constitute the fixing of a selling price in contravention of section 4(1)(b)(i) and (ii) of the Act.
Maize milling
According to the Commission, its investigation revealed that between 1999 and 2007, representatives and employees of the implicated companies discussed pricing, agreed on price increases and the timing of such increases during meetings and telephone calls. The Commission concluded that this conduct amounted to price fixing and fixing of trading conditions in contravention of the Competition Act.
In March 2010, the Commission referred the wheat milling cartel case to the Tribunal against Premier and others. It also referred the maize milling complaint against a total of 17 respondents, including Premier.
A copy of the settlement agreement will be made available on the Tribunal’s website in due course at www.comptrib.co.za.
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