Competition Commission of South Africa approved several M&A deals

Competition Commission of South Africa approved several M&A deals
23.09.2022 70

Competition Commission of South Africa approved several M&A deals. 

California Holding III Limited (“Acquiring Firm” or “California”)/ Imerys S.A.’s High-Temperature Materials and Solutions business ("Imerys HTS" or "Target Firm") 

The Commission has approved the proposed transaction whereby California acquired Imerys HTS, without conditions. 

The primary acquiring firm is California, a private limited company incorporated under the laws of the United Kingdom. California is a newly incorporated special purpose vehicle that has been established to implement the proposed transaction. 

The Acquiring Group indirectly controls the several entities in South Africa which are active in: 

  • The supply of specialty chemicals and services for process, functional, and water treatment applications; 
  • The harvesting and supply of frozen seafood products; 
  • The supply of injection moulding equipment and services to the plastics industry; and 
  • The global manufacturing of high-performance rigid protective cases, advanced portable lighting systems, and outdoor consumer products for highly resilient government, commercial, and consumer markets. 

The Acquiring Group specializes in the acquisition and operation of companies that provide services and solutions to customers in a broad range of businesses which include information technology, telecommunications, logistics, metal services, manufacturing, and distribution. The Acquiring Group typically engages in an operational restructuring of the companies that it acquires, with a focus on improving operational performance and re-orienting the business to meet customer demands in changing markets. 

The primary target firm is Imerys HTS, which is ultimately controlled by Imerys S.A., which in turn is listed on the Euronext Paris stock exchange. 5 Imerys S.A is a global provider of high-temperature refractory solutions and services, offering thermal protection of industrial equipment as well as flow and casting enhancement to a number of customers ranging from the iron, steel, foundry, and thermal industries. 

In South Africa, the Target's business is conducted through its subsidiary, Calderys SA, which supplies unshaped refractories and is not active in the remaining products and services offered by the Imerys HTS business. The Commission found that the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in any relevant markets. 

The Commission further found that the proposed transaction does not raise any public interest concerns. 

Sakhumnotho Capital Proprietary Limited ("Sakhumnotho")/ Pakworks Proprietary Limited ("Pakworks") 

The Commission has approved the proposed transaction whereby Sakhumnotho acquired Pakworks, without conditions. 

The primary acquiring firm is Sakhumnotho, which forms part of Sakhumnotho Group Holdings. 

Sakhumnotho Group Holdings is an investment holding company. Its current portfolio includes interests in agriculture, mining, mining services, oil and gas, renewable energy, property and telecoms, media, and technology. 

The primary target firm is Pakworks, whose businesses are integrated with Zutco ("Target Group"). 

The Target Group is involved in the contract manufacturing of savoury snacks. In particular, the Target Group manufactures and packages NikNaks and Simba Peanuts on behalf of Simba. 

The Commission found that the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in any relevant markets. The Commission further found that the proposed transaction does not raise any public interest concerns. 

The Shadow Capital (Pty) Ltd & Shadow Capital Agri (Pty) Ltd ("SC Group”)/ Blue Ocean Mussels (Pty) Ltd (“BOM”) and Gallo Group (Pty) Ltd (“Gallo”)

On 19 September 2022, the Commission approved the proposed transaction whereby SC Group will acquire GOM and Gallo, with conditions. 

The primary acquiring firms are Shadow Capital and Shadow Capital Agri, private companies incorporated in accordance with the laws of South Africa. Shadow Capital Agri is wholly owned by Shadow Capital. Shadow Capital is not directly or indirectly controlled by any entity. Shadow Capital and all the firms directly and indirectly controlled by it will hereinafter collectively be referred to as the “SC Group”.

The SC Group is a private investment group, which specializes in investing in and assisting small to medium size companies to grow into sustainable, successful businesses. They have particularly strong expertise in the agriculture sector where its management has been active for many years. 

The primary target firms are BOM and Gallo, private companies incorporated in accordance with the laws of South Africa. BOM is wholly owned by Terrasan Beleggings (Pty) Ltd (“Terrasan”). Terrasan Beleggings is controlled by the Terrasan Group Limited. BOM does not directly or indirectly control any firm. Gallo is not directly or indirectly controlled by any entity. Gallo does not directly or indirectly control any other entities. BOM and Gallo will hereinafter collectively be referred to as the “Target Firms”. 

BOM is involved in the farming (harvesting & seeding), processing and the sales and marketing of both fresh and frozen mussels. Gallo is only involved in the processing of mussels and is not active in the farming of mussels. Both the Target Firms produce frozen mussel products which are sold on a wholesale basis in South Africa. BOM and Gallo are both located in Saldanha Bay. As part of the proposed transaction, the operations of BOM and Gallo will be merged into a single entity and it will be named “New BOM”. 

The Commission found that the proposed transaction will not lead to a substantial prevention or lessening of competition. Further, the Commission and the merging parties agreed to a number of public interest conditions aimed at protecting the employees of the merging parties, encouraging procurement from HDPowned suppliers as well as the promotion of a greater spread of ownership by workers in the market. 

Here you can read the full Statement on the latest decisions by the Competition Commission

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