Lodestone Nat Pride

The judgment

The court's own file

competitiontribunal south africa fax form fo Mark Garden fax Edward Nathan Sonnenbergs 011 269 7899 ———— ——--- Legal Services -- > - 44283 ~ Competition Commission ref 71/LM/Aug11 date 07 October 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 Glu Tebogo Mputle CC: Dineo Mashego - 44584 37 Floor, Mulayo, the dti Campus, 77 Meintjies Street, Sunnyside, Pretoria Tel: +27 (12) 394 3300 Fax: +27 (12) 3940169 Email: ctsa@comptrib.co.za i Private Bag X24, Sunnyside 0132 Website: http:/Avwww.compirib.co.za competitiortribunal yeuthafeies COMPETITION TRIBUNAL OF SOUTH AFRICA Case No:71/LM/AUG11 In the matter between: LODESTONE BRAND (PTY) LTD Acquiring Firm And NATIONAL PRIDE TRADING 4 (PTY) LTD Target Firm Panel : Norman Manoim (Presiding Member) Andiswa Ndoni (Tribunal Member) Medi Mokuena (Tribunal Member) Heard on : 28 September 2011 Order issued on : 28 September 2011 Reasons issued on : 07 October 2011 Reasons for Decision Approval

[1]On 28 September 2011, the Competition Tribunal (“Tribunal”) approved the large merger between Lodestone Brands (Pty) Ltd and National Pride Trading 4 (Pty) Ltd. We explain below our reasons for this conclusion. The Parties to the transaction

[2]The primary acquiring firm is Lodestone Brands (Pty) Lid (“Lodestone”) a firm incorporated in accordance with the laws of the Republic of South Africa. Lodestone is controlled 60% by Standard Chartered Private Equity (Mauritius) Ill Ltd, a wholly owned subsidiary of Standard Chartered Bank PLC. Lodestone controls two subsidiaries, namely Candy Tops (Pty) Ltd and Cyndara 224 (Pty) Ltd (“‘Cyndara’).

[3]The primary target firm is Nationa! Pride Trading 4 (Pty) Ltd (“National Pride’), a company incorporated in accordance with the laws of the Republic of South Africa. National Pride is controlled 95% by Ebrahim Kara and does not control any subsidiaries.

[4]In terms of the transaction, Lodestone will acquire as a going concern, an indirect unfettered control over the business of National Pride, through one of its subsidiaries, Cyndara. The transaction consists of two phases, the first of which entails a subscription by Ebrahim Kara of 35% interest in Cyndara which then leaves the shareholding in Cyndara 60% by Lodestone, 35% by Ebrahim Kara and the remaining 5% by one, Luciano Giovio. The second phase entails an acquisition by Cyndara of the National Pride business.

[5]Therefore, as the acquisition by Ebrahim Kara of an interest in Cyndara does not confer any minority interest protection, pursuant to implementation of the transaction, Cyndara will acquire sole control over the business of National Pride. The Rationale

[6]The merging parties submitted that National Pride is an attractive investment opportunity as Lodestone wishes to establish and grow a diverse portfolio of businesses within the fast moving consumer goods sector in the country. The parties’ activities

[7]Lodestone’s activities are limited to its subsidiary, Candy Tops, a manufacturing firm involved in the marketing and distribution of a wide range of sugar confectionary products such as bubble-gum, boiled sweets, éclairs, toffees, chews and caramel.

[8]National Pride is involved in the manufacturing, marketing and distribution of baby diapers. The relevant market and the impact on competition

[9]As the parties are active in different markets, the Commission found that the transaction does not result in any product overlap. Therefore, the Commission concluded that the proposed transaction is unlikely to result in any substantial prevention or lessening of competition in the relevant markets CONCLUSION

[10]The parties submitted that the proposed transaction will not result in employment losses. The proposed transaction does not raise any other public interest issues.

[11]We agree with the Commission's conclusion above and find that the merger is unlikely to lead to any substantial prevention or lessening of competition in the relevant markets. Accordingly, we approve the above merger unconditionally. \ 07 October 2011 NORMAN MANOIM DATE Medi Mokuena and Andiswa Ndoni Tribunal Researcher: Tebogo Hlafane For the merging parties: | Edward Nathan Sonnenbergs Aitorneys For the Commission: Dineo Mashego ke Communication Result Report ( 7. Oct. 2011 14:56] x x x ho te/Time:....7, Oct.2011 14:50 Page Not SentDestination Result 7651 Memory TX 00112697899 4 tebogo 44283 OK Reason for error E 1} Hane up or line fail E.2) Busy _ : oO answer E. No f £.5) Exceeded max, E-mail size 4) No facsimile connection competitiontribunal reuth africa < Sax form to Mark Garden fax Edward Nathan Sonnenbergs O11 269 7899 —— a = Legal Services * 44283 _ : Competition Commission. ref 7A/LMtAug 11 date ‘07 October 2011 from ‘Teboge Mputle pages 4 (including this page) re Reasons: ‘This message is intended only for the use of the addressee. and may contain information thatis priviieged and ial. if you are not the i you are hereby notified that any dissemination of this communicationis strictly prohibited. If you have received this ‘communicationin error, please notify us immediately by telephone. Attached please find ihe Tribunal's reasons for the decisicn in the above matter. Regards go. Tebogo Mputle CC: Dineo Mashego - 44584 £1 Private Bing X74, Sunnysits 01323" Floor, Mulayo, the di Campus, 77 Meiniies Street, Sunnyside, Pretoria WebsitesTet: 427 {12) 3943300 Fax: 427 (12) 384 0169 Email: