Tribunal approves merger in the market for
the manufacture of motor vehicles
The Tribunal has unconditionally approved the large merger whereby Daimler Truck Holding AG (“DT Holding AG”) will acquire Daimler Trucks AG (“DTAG”). The transaction is essentially a divestiture of DAG’s trucks and buses business to a new entity. Following implementation of the transaction, DT Holding AG will control DTAG and all its subsidiaries.
DT Holding AG is a German entity newly established for purposes of the proposed transaction. It is currently a wholly owned subsidiary of Daimler AG (“DAG”), a publicly listed stock corporation incorporated in Germany. DAG is listed on the Stuttgart and Frankfurt Stock Exchanges. Its shares are widely held such that DAG is not controlled by any one firm. DAG is the parent company of the Daimler Group which globally develops, manufactures, and distributes automotive products, mainly passenger cars, vans, trucks and buses and provides related financial and mobility services.
DTAG is a wholly owned subsidiary of DAG. It operates the trucks and buses business within the Daimler Group, which focusses on the manufacturing and sale of trucks and buses in various jurisdictions. In South Africa, DTAG controls various firms whose activities are closely linked or ancillary to Daimler's trucks and buses business.
The Tribunal has concluded that the transaction is unlikely to substantially prevent or lessen competition in any market in South Africa given the absence of any overlaps in the parties’ activities. In addition, the merger does not raise any employment or other public interest concerns.
Tribunal unconditionally approves merger between Digital Infrastructure Investment Holdings (Pty) Ltd And Metro Fibre Networx (Pty) Ltd
The Tribunal has unconditionally approved the large merger whereby Digital Infrastructure Investment Holdings (Pty) Ltd (“DIIH”) will acquire control in Metro Fibre Networx (Pty) Ltd (“MetroFibre”).
Following its assessment of the transaction, the Tribunal concluded that the merger is unlikely to substantially prevent or lessen competition in any relevant market in South Africa, as MetroFibre will continue to face competition in the Fibre-To-The-Home ("FTTH") or Fibre-To-The-Business ("FTTB") markets.
In relation to the public interest considerations, the merger parties provided an unequivocal statement that there will be no job losses as a result of the merger. Regarding the spread of ownership, the parties submitted that broad–based black economic empowerment ("B-BBEE") ownership in MetroFibre will be maintained at a specific percentage following the transaction, in accordance with the requirements stipulated by the Independent Communications Authority of South Africa (“ICASA”). The Tribunal therefore concluded that the transaction does not raise any public interest concerns.
The current shareholders in DIIH are Old Mutual Life Assurance Company (South Africa) Limited (“OMLACSA”) in respect of the pooled portfolio of assets of the Infrastructural, Developmental and Environmental Assets Managed Fund (“IDEAS Fund”); and African Infrastructure Investment Fund 3 GP (Pty) Ltd, in its capacity as general partner of African Infrastructure Investment Fund 3 (“AIIF3”).
DIIH was formed as a special purpose vehicle to facilitate investments by funds managed by African Infrastructure Investment Managers (“AIIM”) in MetroFibre and does not conduct independent operations. AIIM develops and manages private equity infrastructure funds designed to invest in long-term institutional unlisted equity in African infrastructure projects. AIIF3 is AIIM’s flagship, pan-African infrastructure fund which targets core and core-plus infrastructure investments in the power, transport and midstream energy sectors across sub-Saharan Africa. The IDEAS fund is a domestic infrastructure equity fund which invests in economic infrastructure (roads and railways), social infrastructure (housing and public private partnerships) and renewable energy infrastructure (solar and wind projects) in the SADC region. Old Mutual Emerging Markets (Pty) Ltd (“OMEM”) provides individuals, businesses, corporates and institutions with long-term savings, protection, investment and lending solutions. It also operates as an insurance company providing life, health and disability insurance services.
MetroFibre was launched in 2010 and operates as a provider of FTTH and FTTB. MetroFibre has expanded its service offering to both residential and corporate customers. MetroFibre owns and manages its core network which is a globally compliant Carrier Ethernet 2.0 open access network.
OVA, Sudor Coal admit to implementing an intermediate merger before approval - parties agree to pay a fine
Overlooked Colliery Alpha (Pty) Ltd (“OVA”) and Sudor Coal (Pty) Ltd (“Sudor Coal”) admit that they may have contravened section 13A(3) of the Competition Act by implementing an intermediate merger prior to the approval of the transaction by the Competition Commission – and have agreed that OVA will pay an administrative penalty in this regard, amounting to R577 500.
This forms part of the terms of a consent agreement which has been confirmed as an order of the Tribunal.
In terms of the consent agreement, the respondents also undertake to notify the Commission of any future transactions that constitute a notifiable merger and agree to refrain from engaging in prior implementation of notifiable mergers in contravention of the Competition Act.
In addition, the respondents agree to develop and implement a competition law compliance programme as part of their corporate governance policy, designed to ensure that its employees, managers, directors and agents do not contravene the Competition Act in future.
In February 2021, the Commission received notice of an intermediate merger transaction, which had been filed by OVA and Sudor Coal. In terms of the transaction, OVA acquired the target firms owned by Sudor Coal comprising the Weltevreden, Kalbasfontein and Halfgewonen collieries (including property, plant, equipment, employees and mining rights) which comprised an underground coal mine and a coal washing plant in Mpumalanga. In the merger filing, the respondents indicated that the transaction was effected in various stages in 2019 and 2020, and accordingly sought the retrospective approval of the transaction.
The Commission evaluated the transaction and found that it was unlikely to have resulted in the substantial lessening or prevention of competition in any market, that it was unlikely to negatively impact on employment and that it did not raise any public interest concerns. The Commission approved the transaction in May 2021.
The issue of prior implementation, to which the abovementioned consent agreement relates, was dealt with separately. The Commission found that the transaction was implemented in various stages in 2019 and 2020, and the respondents concluded various agreements to implement the different aspects of the transaction including the following:
- Sale of Immovable Properties and Plant and Equipment Agreement in terms of which OVA would purchase Sudor Coal’s immovable properties, plant and equipment; and
- Sale of Mining Rights Agreement in terms of which OVA would purchase Sudor Coal’s mining rights pertaining to the Weltevreden, Kalbasfontein and Halfgewonen Collieries, and the liabilities would transfer to Overlooked.
On 1 August 2019, Sudor Coal appointed OVA as its contractor to conduct mining services on its behalf pursuant to the mining rights granted to Sudor Coal in terms of the Contract Mining Agreement. Simultaneously, OVA entered into an Off-take Agreement with Sudor Coal such that it would acquire some of the coal that it had mined on Sudor Coal’s behalf.
The mining rights transferred from Sudor Coal to OVA on 30 June 2020, which was 10 business days after the Minister of Mineral Resources granted the statutory consent to the cession and transfer of the relevant mining rights from Sudor Coal to OVA.
The respondents voluntarily informed the Commission of their bona fide prior implementation error, in their merger filing, after they became aware of the fact that the transaction constituted a notifiable merger transaction.