Outcome of Tribunal cases - 10 October 2019
Type of matter
Commission’s recommendation to the Tribunal
Lebashe Investment Group (Pty) Ltd And Tiso Blackstar Group (Pty) Ltd, Rise Broadcast (Pty) Ltd and Vuma 103 FM (Pty) Ltd
Approve the transaction without conditions
Approved without conditions
Brookfield Asset Management Inc And Oaktree Capital Group, LLC
Approve with conditions
Approved with conditions
Competition Commission And Lenmed Health (Pty) Ltd; Lenmed Ethekwini Hospital and Heart Centre (Pty) Ltd
Confirm as an order of the Tribunal
Confirmed as an order of the Tribunal
Filing fee refund
Vresthena (Pty) Ltd and Dimas Family Trust And Competition Commission
Commission opposes application
Tribunal approves Lebashe / Tiso Blackstar transaction
The Tribunal has approved Lebashe Investment Group’s acquisition of Tiso Blackstar Group, Rise Broadcast and Vuma 103 FM. No conditions have been imposed on the transaction.
The Competition Commission, which evaluates large mergers before referring them to the Tribunal for a final decision, confirmed during the hearing that two trade unions and the Department of Trade, Industry and Competition raised employment concerns in relation to the merger.
Tiso Blackstar had retrenched employees between June and August this year – and a further round of retrenchments is anticipated after the transaction has been concluded. However, a legal representative for the companies told the Tribunal that the anticipated retrenchments are not merger related and will be carried out irrespective of the proposed transaction.
The retrenchments have been ascribed to structural changes in the media industry, shifts in media consumption towards digitisation, weak economic activity, advertisers reducing their marketing spend, a decline in newspaper production volumes and a decline in the company’s revenue, among others.
A Tiso Blackstar representative told the Tribunal that “if the economy turns” there is a possibility of creating employment opportunities in the journalistic space as (Tiso Blackstar) is trying to grow the business in terms of content.
The merging parties also submitted that retrenchments are not unique to Tiso Blackstar and that South Africa’s media industry in general has been affected by retrenchments.
Tiso Blackstar Group operates in the print and digital media services sector as well as in broadcast and content services (Business Day TV, the Home Channel and Film and Production). Rise FM and Vuma FM are radio stations (businesses).
Lebashe is a 100% black-owned investment holding company with shares in companies that operate in the financial services, information and communications technology sectors. The company is not controlled by any single shareholder or firm.
Tribunal conditionally approves merger in the market for the provision of asset management services
The Tribunal has approved the transaction whereby the Canadian asset management company, Brookfield Asset Management Inc (Brookfield), is acquiring American global asset manager, Oaktree Capital Group LLC (OCG).
The merger has been approved with conditions relating to the fulfilment of the second of two phases of the transaction within a stipulated time period i.e. Brookfield is required to inform the Commission should it acquire sole control over OCG within a specified timeframe. Should it acquire sole control after the specified period, it is required to notify the transaction as a merger, to the extent that the thresholds of an intermediate or large merger are met.
Brookfield, co-listed on the New York Stock Exchange, owns and operates various assets in real estate, renewable power, infrastructure, private equity and public securities. Brookfield does not have any registered funds in South Africa but controls certain companies with operations in South Africa.
OCG, also listed on the New York Stock Exchange, manages asset portfolios in credit, private equity, real estate and listed equities. It controls three entities in South Africa which are active in retail and the wholesale supply of sports/lifestyle footwear, apparel and accessories. The company does not have registered funds in South Africa.
Failure to notify a merger in the provision of health services - Tribunal confirms consent agreement
This matter stems from a failure to notify a merger (implementing a merger without obtaining approval from the competition authorities). It involves a 2010 transaction through which Lenmed Health increased its shareholding in the Lenmed eThekwini Hospital and Heart Centre.
In January 2017, the parties approached the Commission for its view on whether the 2010 transaction had constituted a notifiable merger. The Commission found that the transaction had amounted to an intermediate merger that should have been formally notified to the Commission.
A notice of an intermediate merger was subsequently filed with the Commission in June 2017. The Commission found that the merger did not raise any public interest or competition concerns and approved it without conditions.
In terms of the settlement agreement approved by the Tribunal, the parties admit that the 2010 transaction constituted a notifiable merger and was implemented in contravention of the Competition Act. They have agreed to pay an administrative penalty of R1 250 000.00 (one million two hundred and fifty thousand rand).
Tribunal dismisses application for merger filing fee refund
The Tribunal has dismissed an application for a merger filing fee refund by a company and a family trust that abandoned their proposed transaction, involving several target firms, three months after it had been notified to the Competition Commission.
Vresthena (Pty) Ltd and the Dimas Family Trust brought the matter to the Tribunal after they could not reach an agreement with the Commission.
The Applicants argued that they were entitled to a 75% refund because the Commission could not have spent time and resources on assessing the intermediate merger that would justify it retaining the entire filing fee.
The Commission opposed the application based on, among others, the fact that it had conducted an assessment of the merger, requiring a substantial amount of work and resources, before the notified transaction was abandoned.
The Tribunal’s reasons for its decision will be issued in due course.
Gillian de Gouveia
Tel: +27 (0) 12 394 1383
Cell: +27 (0) 82 410 1195
Back to Press Releases