Mr Price And Otto Brothers

The judgment

The court's own file

CONFIDENTIAL 1 ANNEXURE A IN THE LARGE MERGER BETWEEN MR PRICE GROUP LIMITED AND OTTO BROTHERS DISTRIBUTORS (PTY) LTD CT CASE NUMBER: LM180Jan21 CONDITIONS 1. DEFINITIONS AND INTERPRETATION 1.1. In this document the following expressions bear the meanings assigned to them below and related expressions bear corresponding meanings 1.1.1. means the date the Tribunal issues a Clearance Certificate (Notice CT10) in terms of the Competition Act; 1.1.2. "Commission" means the Competition Commission of South Africa, a statutory body established in terms of section 19 of the Competition Act; 1.1.3. "Competition Act" means the Competition Act, 89 of 1998, as amended; 1.1.4. "Conditions" means the conditions set out herein; 1.1.5. ation Date 1.1.6. means the South African Clothing, Textiles, Footwear and Leather sector; 1.1.7. means the Mr Price Group, including Power Fashion; 1.1.8. means the acquisition of control over Power Fashion by Mr Price Group; 1.1.9. " means Mr Price Group and Power Fashion; 1.1.10. " means Mr Price Group Limited; 1.1.11. means the retail apparel business operated by Otto Brothers (Pty) Ltd and its subsidiaries, trading as Power Fashion and Power Fashion Factory; CONFIDENTIAL 2 1.1.12. R- means the South African Clothing, Textiles, Footwear and Leather masterplan vision for 2030. One of the objectives of the R-CTFL Masterplan Initiative is to increases the share of local retail sales of locally manufactured clothing and footwear to 65% by 2030; 1.1.13. " means the Republic of South Africa; 1.1.14. "Tribunal" means the Competition Tribunal of South Africa, a statutory body established in terms of section 26 of the Competition Act; and 1.1.15. means the Rules for the Conduct of Proceedings in the Tribunal. 2. CONDITIONS TO THE APPROVAL OF THE MERGER 2.1. It is recorded that Power Fashion currently procures approximately 41% of its product units from local sources in South Africa. In order to support the R-CTFL Masterplan Initiative, the Merged Entity shall, for a period of 5 (five) years from the Implementation Date, ensure that Power Fashion maintain or improve on the current level of procurement of goods and services from South African sources. 2.2. Parties shall ensure that Power Fashion participate in the R-CTFL Masterplan Initiative along with the rest of the Mr Price Group. 3. MONITORING OF COMPLIANCE WITH THE CONDITIONS 3.1. Mr Price Group shall submit a report to the Commission on compliance with on each anniversary of the Approval Date, setting out its compliance with clauses 2.1 and 2.2 of the Conditions, for the duration of the Conditions. This report shall be accompanied by an affidavit, attested to by a director of the Mr Price Group confirming the accuracy of the report. 3.2. The Commission may request such additional information from the Merging Parties which the Commission from time to time regards as necessary for the monitoring of compliance with these Conditions. 4. BREACH 4.1. In the event the Commission receives any complaint in relation to non-compliance with the above Conditions, or otherwise determines that there has been an apparent breach by the CONFIDENTIAL 3 Merging Parties of these Conditions, the breach shall be dealt with in terms of Rule 39 of the Commission Rules read together with Rule 37 of the Tribunal Rules. 5. VARIATION OF THE CONDITION 5.1. The Commission or the Merging Parties may at any time, on good case shown, apply to the Tribunal for the Conditions to be lifted, revised or amended. 6. GENERAL All correspondence in relation to these conditions must be submitted to the following email address: mergerconditions@compcom.co.za and ministry@thedtic.gov.za. 1 COMPETITION TRIBUNAL OF SOUTH AFRICA Case no: LM180Jan21 Mr Price Group Ltd (Primary Acquiring Firm) and Otto Brothers Distributors (Pty) Ltd (Primary Target Firm) REASONS FOR DECISION

[1]On 17 March 2021, the Competition Tribunal conditionally approved the large merger between ors (Pty) Ltd .

[2]The transaction involves Mr Price acquiring control of the retail apparel business operated by Otto Brothers, trading as Power Fashion.

[3]Mr Price 1 is a national clothing retailer active in the provision of fashion and sport apparel, footwear, accessories, and other goods, such as homeware and mobile products, under various brands. Mr Price operates through the following divisions: (i) Mr Price Apparel, (ii) Miladys, (iii) Mr Price Sport, (iv) Mr Price Home and (v) Sheet Street.

[4]Power Fashion is a national clothing retailer offering affordable clothing, footwear, cosmetics, mobile handsets and airtime, basic household items, electricity, and other products. Power Fashion is a privately owned company, and a family-run business.

[5]The Competition Commission identified a horizontal overlap in the activities of the merging parties. As such, the impact of the transaction was assessed on the broad market for the retail of apparel and the narrow markets for the retail of clothing, footwear, accessories, homeware, and mobile handset and airtime products in South Africa. In the broad market for the retail of apparel, the post-merger market share is <18% with an accretion of <2%. Similarly, in the narrow markets for the retail of clothing, footwear, accessories, homeware, and mobile handset and airtime products, the market share accretions as a result of the proposed transaction are low and do not raise any competition concerns.

[6]The merger parties will continue to face competition from other players. 2 1 Mr Price is a public company listed on the Johannesburg Stock Exchange and it is not controlled by any single shareholder. 2 The Foschini Group, Legit, Truworths, Cotton On, Exact, The Fix, Pick n Pay Clothing, Edgars, Pep, Jet, Ackermans, Dunns, and independent retail stores such as Express, Jumbo Clothing, Jam, Fashion World, Fashion Fusion, Choice Clothing and Clothing Junction.