Friday, May 31, 2013

■ SOUTH AFRICA: Competition Tribunal okays acquisition of Lanseria Airport, but with conditions attached.

South Africa's Competition Tribunal has approved the proposed acquisition of Johannesburg's Lanseria International Airport near Johannesburg by black economic empowerment company Holdco though conditions have been imposed on the deal.

Lanseria International Airport, Johannesburg
Lanseria International Airport, Johannesburg (LIA)
During a hearing on May 29, the South African Competition Commission stated that it had concerns over one of the shareholders in Holdco, the Public Investment Corporation (PIC), who also has interests in Airports Company South Africa, owners of the competing OR Tambo International Airport.

Holdco is constituted by the Public Investment Corporation (PIC), the Pan African Infrastructure Development Fund, Harith, and a Black Economic Empowerment consortium which includes the women's empowerment company Nozala; and the Government Employee Pension Fund (GEPF).

According to BusinessDay, Holdco intends to buy 50% of the airport and 100% of Execujet Airline Investments. After the deal is implemented, Execujet is to hold the remaining 50% of the airport, where it provides management and aviation services.
During the hearing, the Competition Tribunal’s biggest concerns about the deal were the possibility that Holdco would default on its loan used to acquire shares at Execujet, which would give the PIC de facto control over Lanseria, and the possible sharing of sensitive information between Lanseria and OR Tambo airports.

The commission recommended that the tribunal approve the transaction with conditions aimed at preventing the anticompetitive exchange of information.

The tribunal also recommended that information provided to shareholders with ties to Holdco be less detailed and disaggregated.
Source [BusinessDay]

These conditions include a provision that the PIC should not appoint any common directors to the boards of Lanseria airport and Acsa and should any scenarios arise in which the PIC would be able to gain total control of Holdco, the PIC would necessarily have to consult the Competition Commission.