Merger Alert: Outcome of mergers decided by the Tribunal - 26 July 2024

The Competition Tribunal (“Tribunal”) has approved the proposed merger wherein Thebe SPV 022 (Pty) Ltd (“Thebe SPV”) intends to acquire additional shares in Pride Milling Company (Pty) Ltd (“Pride Milling”) through the exercise of a call option. Following the implementation of the proposed transaction, Thebe SPV will exercise sole control over Pride Milling.

The Tribunal has approved the proposed transaction subject to public interest conditions which seek to promote a greater spread of ownership i.e. Pride Milling is to establish an employee share ownership programme (“ESOP”); a procurement commitment involving Pride Milling procuring new trucks (in addition to its existing fleet directly for its business) to deliver maize products to townships and rural areas and/or to facilitate the purchasing of maize directly from farms owned and/or controlled by historically disadvantaged persons (“HDPs”); and an enterprise development commitment involving Pride Milling making its capacity for the processing of additional maize available to commercial farms owned or controlled by HDPs.

Thebe SPV does not conduct any business activities in South Africa or elsewhere and presently has a single investment, being its shareholding in Pride Milling.

Pride Milling is active in the manufacturing, marketing and distribution of basic and essential staple food products (predominantly white maize products) to local and international customers. In South Africa, its activities are predominately limited to the manufacture, marketing and distribution of milled maize products. Pride Milling's main product lines are white maize products, pulses, mabele (sorghum), yellow maize products (whole maize and crushed maize) including other human consumption products and animal feed (bird seed, fowl feed and pet food). Pride Milling also buys beans from farmers, packages, rebrands and sells them to retailers.

The Tribunal has approved the proposed merger whereby Hollywood Racing Enterprises (Pty) Ltd (“HRE”) intends to acquire Gold Circle (Pty) Ltd (“Gold Circle”). Post-merger, HRE will have sole control over Gold Circle.

The Tribunal has approved the merger subject to public interest conditions involving HDP procurement and socio-economic development; capital expenditure and skills development commitments; as well as commitments which seek to protect jobs.

The acquiring group is licensed as a racecourse operator and totalisator based in the Western Cape. As a totalisator, it offers tote bets on a horse race, sporting event and other contingency in the Western Cape. As a racecourse operator, it holds thoroughbred horse racing meetings in the Western Cape. It is also a bookmaker and offers fixed odds as well as open bets in all provinces in South Africa, with the exception of the North-West and Northern Cape. The acquiring group operates retail outlets and conducts its online operations on platforms licensed across South Africa and on mobile sites. It also earns revenue from Limited Payout Machines (“LPMs”) placed in its physical outlets.

The target group is a racecourse operator in KwaZulu–Natal, leasing the Greyville Racecourse and Scottsville Racecourse in KZN. It also offers totalisator and bookmaking services in KZN. The target group also provides LPMs in its physical outlets in KZN. Further, the target group owns Gallop TV which features all KZN and Western Cape horse racing together with all contracted international racing broadcasts on which the public places bets.

The Tribunal has approved the merger involving two transactions that constitute a single indivisible transaction: (i) Directors Adventures Trust plans to acquire control of Columbia Falls Properties 7 (Pty) Ltd (“target warehouse”); and (ii) the ABN Trust and the SMB Trust intend to acquire control of Aubsel Investments (Pty) Ltd, City Square Trading 43 (Pty) Ltd, Dusty Moon Investments 193 (Pty) Ltd and XTLS Investments 143 (Pty) Ltd (“target retail properties”).

The Tribunal has approved the proposed merger subject to a procurement condition which seeks to promote the participation of HDPs and small and medium-sized businesses in the South African economy.

The Tribunal has conditionally approved the merger whereby the acquiring firms (comprising a number of firms through Vision Investments 155 (Pty) Ltd (“Vision”)) intend to collectively acquire control over Tongaat Hulett Limited (“THL”) (in business rescue) through the implementation of an approved business rescue plan.

The public interest conditions imposed on the merger seek to promote the participation and empowerment of small-scale/HDP farmers in the South African sugar industry and involve, among others, support towards HDPs within THL’s value chain and the establishment of a small-scale grower’s trust.

The primary acquiring firms are various special purpose vehicles which are owned and controlled by a consortium of parties referred to as the "Vision Parties".

Tongaat is primarily an agriculture and agri-processing business specialising in sugar production and animal feed. Its business comprises sugar operations and animal feed operations.

The Tribunal has conditionally approved the proposed merger whereby MSC II Investments (“MSC II”) intends to acquire Mertech Marine Holdings (Pty) Ltd (“Mertech Holdings”). Post-merger, Mertech

Holdings will be controlled by MSC II and by extension Metier Investment and Advisory Services (“Metier Investment and Advisory”), which controls MSC II.

The Tribunal has approved the merger subject to public interest conditions involving the creation of a specialist e-waste reclamation business that is majority HDP owned and the establishment of an HDP skills development programme.

MSC II is a special purpose vehicle (“SPV”) of the Metier Sustainable Capital International Fund II (“MSCI Fund II”), which is incorporated under the laws of Mauritius. The acquiring group comprises private equity funds, managers of these funds and their underlying investments. The acquiring group’s South African subsidiary, Master Plastics, is of relevance to this proposed transaction. It manufactures packaging from virgin polyethylene pellets. Master Plastics and its subsidiaries procure polyethylene from third party suppliers and other global suppliers for the manufacturing of plastic food packaging.

Mertech Holdings is a private company incorporated in South Africa. The target group utilises its factories in South Africa, Alurite Services and Mertech Cable & Wire, to recycle and beneficiate third party sourced submarine cable as well as recyclable materials sourced from the South African market. The target group’s three main products produced from these activities are copper, steel cable and polyethylene pellets used to make plastic products. The target group does not manufacture virgin polyethylene but only manufactures recycled polyethylene.

Issued by:

Gillian de Gouveia, Communications Manager

On behalf of the Competition Tribunal of South Africa

Cell: +27 (0) 82 410 1195

E-Mail: GillianD@comptrib.co.za

Twitter: @comptrib