Main Street 1511 And Roossenekal Foods

The judgment

The court's own file

COMPETITION TRIBUNAL OF SOUTH AFRICA Case No: LM265Jan18 In the matter between: Main Street 1511 (Pty) Ltd Primary Acquiring Firm And Roossenekal Foods Investment Holdings (Pty) Ltd Primary Target Firm Panel : Andreas Wessels (Presiding Member) : Mondo Mazwai (Tribunal Member) : Andiswa Ndoni (Tribunal Member) Heard on : 21 February 2018 Order Issued on : 21 February 2018 Reasons Issued on _: 5 March 2018 REASONS FOR DECISION Approval

[1]On 21 February 2018, the Competition Tribunal (“Tribunal”) unconditionally approved the proposed transaction involving Main Street 1511 (Pty) Ltd (‘Bidco") and Roossenekal Foods Investment Holdings (Pty) Ltd (“Roossenekal"), hereinafter collectively referred to as the merging parties.

[2]The reasons for approval of the proposed transaction follow. Parties to the proposed transaction Primary Acquiring Firm BI

[4]5} (6) Bidco is a newly established entity for purposes of the proposed transaction. It currently conducts no business activities in South Africa. Bidco is controlled, through various offshore holding companies, by private equity investment funds that are ultimately controlled by Abraaj Holdings (‘Abraaj"), @ company incorporated in accordance with the laws of the Cayman Islands. Abraaj and its various subsidiaries and investments funds are hereinafter collectively referred to as the ‘Abraaj Group’. The Abraaj Group directly and indirectly controls a number of entities globally. In South Africa, the Abraaj Group manages private equity funds which control Libstar Holdings (Pty) Ltd (“Libstar’). Libstar is broadly active in the foods and services sector, namely the manufacture and distribution of food, beverage and other consumer products. Primary Target Firm 7 (8)

[9]Roossenekal is controlled by the Elaine and Selwyn Schaffer Family Trust ("Schaffer Family Trust’). Roossenekal controls Roossenekal Foods (Pty) Ltd (“Roossenekal Foods") and Roossenekal Two (Pty) Ltd ("Roossenekal Two”). Roossenekal, through its subsidiaries, trades as a KFC franchisee. Roossenekal Foods owns and operates 45 KFC stores and Roossenekal Two owns and operates 17 KFC stores. These KFC franchises are located in Mpumalanga, Gauteng, the North West and Limpopo. Proposed transaction

[10]In terms of the Sale of Shares and Claims Agreement, Bidco will acquire 100% of the issued capital in Roossenekal and would therefore control Roossenekal post-merger. Impact on competition

[11]The Competition Commission ("Commission") found no horizontal overlap between the activities of the merging parties since the Abraaj Group does not have interests in any KFC or other fast food retail operations in South Africa. The Commission therefore concluded that proposed transaction is unlikely to ‘substantially prevent or lessen competition in any relevant market. We agree with the Commission's conclusion. Public interest

[12]The merging parties confirmed that the proposed transaction will not result in any retrenchments or job losses."

[13]The proposed transaction raises no other public interest concerns. Conclusion

[14]_ In light of the above, we conclude that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market. In addition, no public interest issues arise from the proposed transaction. Accordingly, we approve the proposed transaction unconditionally. 5 March 2018 Mr fessels Date Ms Mondo Mazwai and Ms Andiswa Ndoni concurring "Merger Record, pages 10 and 206. Tribunal Researcher: Hlumelo Vazi For the Merging Parties: +S Van der Meulen of Webber Wentzel and M Sambo of ENSafrica For the Commission: | Mhlongo and Z Hadebe