The Tribunal has approved, with conditions, the proposed merger wherein Shoprite Supermarkets (Pty) Ltd (“Shoprite”) intends to acquire certain retail supermarket stores, wholesale and retail liquor stores, wholesale stores and the Massfresh business from Massmart Holdings Limited (“Massmart”).
The conditions imposed by the Tribunal seek to address identified competition and public interest concerns and include the divestiture of certain retail stores by Massmart as well as public interest commitments relating to employment; the spread of ownership; localisation; and retailer, supplier and skills development.
The Tribunal’s order follows a three-day merger hearing in which the merging parties; the Department of Trade, Industry and Competition (“the dtic”); two intervenors, namely Pick n Pay and Spar; and the South African Commercial Catering and Allied Workers Union (“SACCAWU”) participated. The hearing was further followed by information requests from the Tribunal and consideration of the numerous responses received to the information requests from participating parties.
The Tribunal’s order and a non-confidential version of the conditions will be available on the Tribunal website at
www.comptrib.co.za in due course. A summary follows below:
Divestiture conditions aimed at addressing competition concerns
The Commission identified ten grocery retail stores as “Highly Problematic Stores”, namely Cambridge Botshabelo; Cambridge Thaba Nchu; Cambridge Nkandla; Cambridge Ladybrand; Cambridge Mitchell’s Plain; Rhino Qumbu; Cambridge Nongoma; Cambridge/Savemoor Tembisa; Rhino Ulundi; and Cambridge Evaton. To address the competition concerns identified in relation to the Highly Problematic Stores, the Commission recommended franchising four of the ten stores and a funding package to facilitate competition from one existing, high potential, black-controlled independent retail competitor for the remaining six. The intervenors argued for a prohibition of the merger.
After considering the Commission’s recommendation and the submissions of the participating parties, the Tribunal ultimately approved the proposed merger on the basis that the ten Highly Problematic Stores must be divested by Massmart to a suitable purchaser/s within a specified period from the Tribunal’s approval of the merger (“the divestiture period”). The purchaser/s must be an independent third party/ies unrelated to Shoprite; must be a small or medium sized business/es ("SMMEs") and/or historically disadvantaged person/s ("HDPs"); and must possess the necessary financial resources, proven technical expertise and incentive to develop the Highly Problematic Stores as viable and competitive in the relevant geographic areas.
During the divestiture period, Massmart must: