| Fri 5 Nov 2010, 12:20 | | THEE - Notice of upcoming Competition Tribunal hearings |
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JSE
THEE
THEE - Notice of upcoming Competition Tribunal hearings
NOTICE OF UPCOMING COMPETITION TRIBUNAL HEARINGS
(Following is a guideline for journalists. The information can be used but
please do not quote Nandi Mokoena or the Tribunal)
Case(s) Freeworld Coatings v Competition Commission and Kansai Paint
Date Tuesday, 9 November 2010
Time 10H00
Place The dti Campus
77 Meintjies Street
Mulayo Building, (Block C)
Sunnyside, Pretoria
Tel: +27 (0) 12 394 3300
Fax: 27 (0) 12 394 0169
Website: http://www.comptrib.co.za
Possible takeover bid in automotive paints
On Tuesday Freeworld Coatings, a JSE listed company, will ask the Competition
Tribunal to set aside a decision of the Competition Commission in which the
Commission refused Freeworld permission to notify it of a merger separately from
the other merging party, Kansai Paint. Kansai, a Japanese listed company, and
Freeworld both produce and market automotive coatings and decorative paints.
Through a JV, Freeworld supplies automotive coatings to several major customers
including Toyota, Ford and Mercedes Benz. According to Freeworld, Kansai and
Freeworld control about 80% of this market.
On 3 September 2010 Freeworld requested the Competition Commission that it be
allowed to notify the Commission of a merger, in which Freeworld is the target,
separately from the acquiring firm, Kansai. Usually merging firms file a common
merger application to the competition authorities. In this case however
Freeworld wanted to file a merger notification separately on the basis that
Kansai`s bid was a hostile takeover. Moreover, it submitted that Freeworld and
Kansai do not agree on the potential competition effects of the merger.
According to Freeworld, Kansai has made a systematic attempt to gain control of
the company including approaching Freeworld`s shareholders without its
knowledge, approaching Freeworld`s Chairman, Mr Bobby Godsell, with the
unsolicited bid and continuing to buy Freeworld`s shares on the open market,
with Kansai`s share of Freeworld now standing at over 26%. Freeworld also thinks
the merger, if approved, would give rise to significant competition problems
given that these two firms are competitors and together would control a
significant portion of the automotive paints market.
The Commission`s view is that Freeworld`s request to it was premature since the
takeover actions it described did not amount to a "proposed merger" as required
in the Competition Act. Kansai also believes the move was premature and says it
hasn`t yet made an offer for the remaining shares in Freeworld.
One of the largest hostile takeover cases concerning an unsolicited bid was
heard in 2005 when Harmony Gold made a bid for Goldfields, which Goldfields
opposed on all fronts. The difference in this matter is however the acquiring
firm Kansai has not yet notified a merger with the Commission.
The Tribunal will hear Freeworld`s application on Tuesday at 10H00, with
representations expected from Freeworld, Kansai and the Competition Commission.
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: 05/11/2010 12:20:00 Produced by the JSE SENS Department.
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