Bvenure McDonalds

The judgment

The court's own file

competitiontribunal south africa fax form to Tamara Dini/Nadisha Singh fax Bowman Gilfillan Inc Lerisha Naidu Cliffe Dekker Hofmeyr 021 424 1688 011 562 1554 Legal Services Competition Commission 44283 ref 29/LM/Apr11 date 08 June 2011 from Tebogo Mputle pages 4 (including this page) re Reasons This message is intended only for the use of the addressee and may contain information that is privileged and confidential. If you are not the intended recipient, you are hereby notified that any dissemination of this communication is strictly prohibited. If you have received this communication in error, please notify us immediately by telephone. Attached please find the Tribunal’s reasons for the decision in the above matter. Regards Tebogo Mputle CC: Zanele Hadebe - 44583 at Floor, Mulayo, the dti Campus, 77 Meintjies Street, Sunnyside, Pretoria Tel: +27 (12) 394 3300 Fax: +27 (12) 394 0169 Email: ctsa@comptrib.co.za Db Private Bag X24, Sunnyside 0132 Website: http:/Awww.comptrib.co.za G eompetitiontribunal Fawsh eeBehe t COMPETITION TRIBUNAL OF SOUTH AFRICA Case No: 29/LM/Apr11 In the matter between: Business Venture Investments No. 1473 (Pty) Ltd Acquiring Firm And NicDonald’s (S.A.) (Pty) Ltd Target Firm Panel : Andreas Wessels (Presiding Member) Medi Mokuena (Tribunal Member) Andiswa Ndoni (Tribunal Member) Heard on : 25 May 2011 Order issued on : 26 May 2011 Reasons issued on : 08 June 20114 Reasons for Decision Approval [1]On 26 May 2011 the Competition Tribunal (‘Tribunal’) approved the proposed transaction involving Business Venture Investments No. 1473 (Pty) Ltd and McDonald’s (S.A.) (Pty) Ltd. The Tribunal’s reasons for approving the transaction are set out below. Parties to the proposed transaction

[2]The acquiring firm is Business Venture Investments No. 1473 (Pty) Ltd which is to be renamed Shanduka Restaurants Company (Pty) Ltd (‘Shanduka Restaurants”), a private company duly incorporated in accordance with the laws of the Republic of South Africa, and controlled by Shanduka Group (Pty) Ltd (“Shanduka’), the parent company of the Shanduka group of companies.

[3]The target firm is McDonald’s (S.A.) (Pty) Ltd (“McDonald’s”), a private company registered in accordance with the laws of the Republic of South Africa, which is ultimately controlied by the New York Stock Exchange listed McDonald’s Corporation.”

[4]In terms of the proposed transaction, Shanduka Restaurants intends to acquire the entire issued share capital of McDonaid’s. The transaction also involves the conclusion of a Master Franchise Agreement between the parties to the merger which will grant Shanduka Restaurants the right to own, operate and license others to operate McDonald’s branded restaurants in South Africa. Rationale for the proposed transaction

[5]Shanduka Restaurants submitted that the proposed transaction will enable the Shanduka group to broaden its investment portfolio through diversification into a growing market and further raise the group’s global profile.

[6]McDonald’s Corporation stated that it is part of their global strategy to seek operational growth for their operations, through local ownership, in line with its Developmental Licensee model, which has been successfully implemented worldwide. It further held the view that the Shanduka group can drive its business in South Africa, developing and realizing the long term growth potential that exists for the McDonald’s brand in the country. Activities of the merging parties and product overlap

[7]Shanduka is a private investment holding company with an investment portfolio comprising of investments in the resources, financial services, property, energy, telecommunications, beverages and industrial sectors.

[8]McDonald’s Corporation operates 32 000 restaurants globally in over 117 countries. The target firm, being the South African part of this global restaurant group, is in the fast food industry and operates and franchises McDonald’s branded restaurants in the informal eating out sector. The Shanduka group premerger does not operate in the informal eating out sector.

[9]As is clear from the above description of the merging parties’ activities, they do not sell or provide any products or services in South Africa that can be considered reasonably interchangeable or substitutable. Furthermore, no vertical relationships exist between the merging parties. * http:/Awww.shanduka.co.za/ ? http://www.medonalds.co.za/ Public interest

[10]The merging parties confirmed that no job losses or retrenchments are anticipated as a result of the proposed transaction and no other public interest issues arise from this transaction. Conclusion

[11]Given that there is no horizontal product/service overlap in the merging parties’ activities and that there are also no vertical relationships between the merging parties, the proposed merger is approved without conditions. | 08 June 2011 A Wessels Date M Mokuena and A Ndoni concurring Tribunal Researcher: Songezo Ralarala For the merging parties: For the target firm: Tamara Dini and Ineke Bosman from Bowman Gilfillan Attorneys For the acquiring firm: Mondo Nthla and Lerisha Naidoo from Cliffe Dekker Hofmeyr Attorneys For the Commission: Zanele Hadebe Date/Time: 1366 Memory TX David x 8, Jun. x 2011 {1 Communication Result Report { :35 Destination 44583 00115621554 00214241688 44283 8. Jun, 2011 11:43) x x No error Hang up or line fail E.2) Busy No answer E.4) No facsimile connection Exceeded max, E-mail size competitiontvibunal siuth africa to ‘Tamara Din#Nadisha Singh fax 021 424 1688 Bowman Gitfillan inc : Lerisha Naidu 011 582 1554 Cliffe Dekker Hofmeyr Legal Services 44283 Competition Commission ref 29/LM/Apr11 date 08 June 2011 from ‘Tebogw Mputle pages 4 (including this page} re Reasons Ifyouare not the i ‘This message is intended only for the use of the addressee and may contain information that is ivi and ti yecipient, you are hereby notified thet ‘any dissemination of this communication is stricily prohibiied. Ifyou have received this communication in error, please notify us Immediately by telephone, Attached please find the Tribunal's reasons for the decision in the above matier. Roam i} ‘Tebogs Mputle CC: Zanele Hadebe -44583 2 Floor, Mulayo, the dii Campus, 77 Meintjiex Street, Sunnyside, Pretoria ial Private Bag X24, ‘Sunnyside 0132 Tet 497 (19) 3942200 Fax. #27112) 3040169 Binal: ctsagtcomptrib.coza Website: hip:/ermv.comptib.oo.za Page Not Sent