| Thu 28 Oct 2010, 10:05 | | THEE - Outcome of Competition Tribunal hearings on Wednesday 27 October 2010 |
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JSE
THEE
THEE - Outcome of Competition Tribunal hearings on Wednesday, 27 October 2010
OUTCOME OF COMPETITION TRIBUNAL HEARINGS on Wednesday, 27 October 2010
(Following is a guideline for journalists. The information can be used but
please do not quote Nandi Mokoena or the Tribunal)
1. Macquarie merger
The Tribunal approved this merger unconditionally.
Background
Macquarie Investment Holdings (MIH), an Australian company, intends to acquire
sole control of Macquarie AirFinance (MAF), a firm based in Bermuda. While MIH
has no business activities in South Africa, its holding company, Macquarie,
provides specialist financial, banking, advisory, investment and funds
management services in South Africa through its various subsidiaries. MAF on the
other hand is a global aviation lessor, providing aircraft to airlines around
the world and asset management services to aircraft owners. MAF has no South
African subsidiaries but it owns 10 aircraft which are currently on lease to
SAA.
According to the merging parties, the basis for the merger is that airlines are
becoming an important part of MIH`s growth. MAF, in turn, will benefit from the
asset management expertise that MIH brings to the deal.
The Competition Commission considered the proposed merger and concluded that it
would not give rise to substantial competition concerns. The Commission
therefore recommended that the Tribunal approve this merger unconditionally.
2. Aveng Africa merger
The Tribunal heard this matter and will make its decision at a later stage.
Background
Aveng Africa intends to acquire the entire issued share capital of Dynamic Fluid
Control (DFC), which is currently held by Standard Bank, Kagiso Strategic
Investments and DWS Investment Trust. Aveng Africa is a multi-disciplinary
construction and engineering company focused on infrastructure, energy and
mining. DFC manufactures and supplies industrial valves to the water and mining
industries.
The Commission assessed the merger and concluded that, although the operations
of the merging parties overlap in the valve market, the merger is unlikely to
lessen competition substantially in this area. The Commission also considered
the possible competition effects of the fact that DFC is already a supplier of
valves to two firms within Aveng Africa`s group, namely Keyplan and GLTA Mining,
but concluded that this too would not result in a substantial lessening of
competition.
Accordingly, the Commission recommended that the Tribunal approve this merger
without conditions.
3. Settlements in the plastic pipes cartel
The Tribunal confirmed the settlement agreement between the Commission and Flo-
Tek. However, as not all parties were present at the hearing, the Tribunal will
set another date for the hearing of the settlement agreement between the
Commission and Swan Plastics.
Background
This hearing concerned 2 proposed settlements in the ongoing plastic pipes
cartel case, being settlement agreements between the Commission and Flo-Tek
Pipes, on the one hand, and the Commission and Swan Plastics on the other.
Both Flo-Tek and Swan Plastics are firms that manufacture plastic pipes used in
the plumbing, civil and agricultural sectors and were accused by the Commission,
along with seven others, of price fixing and tender rigging. At the time, DPI
Plastics, also a plastic pipe manufacturer, assisted the Commission to conclude
its investigation by providing evidence of the collusion in exchange for
immunity from prosecution. Since the Commission referred its case to the
Tribunal, in February 2009, the Tribunal has confirmed one settlement agreement
- between the Commission and Marley Pipe Systems. In that settlement, Marley
admitted it had contravened the Competition Act and agreed to pay a penalty of
around R31 million, being 6% of its turnover for 2007.
While the Tribunal is yet to consider the Swan Plastics settlement agreement, in
the agreements, both Flo-tek and Swan Plastics admit they have contravened the
Competition Act. They also agree to pay penalties of about R5 million and R7
million respectively, being 6% of their turnovers for 2007. In addition, both
parties undertake to cooperate with the Commission`s prosecution of any other
respondents in the case and to implement compliance programmes designed to
ensure that their employees do not engage in such contraventions in future.
While DPI Plastics, Marley, Flo-Tek and Swan Plastics have provided the
Commission with information and evidence in the case, Gazelle Plastics (Pty)
Ltd, McNeil Mouling (Pty) Ltd and Andrag (Pty) Ltd deny the allegations of
collusion against them and are opposing the Commission`s case.
Issued By:
Nandi Mokoena
PR Consultant: Competition Tribunal
Cell: +27 (0) 82 399 1328
E-mail: NandisileM@live.co.za
On Behalf Of:
Lerato Motaung
Registrar: Competition Tribunal
Tel: (012) 394 3355
Cell: +27 (0) 82 556 3221
E-Mail: LeratoM@comptrib.co.za
Date: 28/10/2010 10:05:02 Produced by the JSE SENS Department.
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