COMPETITION COMMISSION

MEDIA RELEASE NO 2

24 JANUARY 2005

Commission Approves Large Merger Between Bidco and Afrox

The Competition Commission “Commission” has recommended to the Competition Tribunal “Tribunal that the large merger between Business Venture Investments No. 790 (Pty) LTD “Bidco” and Afrox Healthcare Limited “Ahealth” be approved subject to certain conditions. This follows a decision last year by the Commission wherein a similar transaction was also conditionally approved. The parties restructured the initial transaction in an attempt to offset the competition concerns it had raised.

As a result of the significant changes made to the initial transaction, the Commission requested the parties to re-file so that it is analysed to address any competition issues that could be raised.

Bidco is a special purpose vehicle created to acquire Ahealth. It comprises of shareholders who have indirect interest in the hospital industry, save for Mvelaphanda and IDC who have shares in Tshwane Hospitals- through Curamed- and Clinix respectively. Ahealth is a firm, which operates in the healthcare industry in the private hospital and healthcare services industries.

According to the Commission the transaction raises minimum competition issues and therefore approved the transaction on the following conditions:

With regards to Mvelaphanda

  • It disposes of its entire shareholding in Tshwane Hospitals within three months from the date of approval.
  • All Mvelaphanda directors on the boards of Curamed and Tshwane Hospitals must resign.
  • Dr. Jackie Mphafudi, who is a director on the board of Medi Clinic and also a director of Mvelaphanda will also resign from the board of Medi Clinic.

With regards to IDC

  • The IDC dispose of their entire shareholding in Clinix within six months from the date of approval
  • Any employee of IDC, who is a director on the boards of Clinix, must resign.

According to Lizel Blignuat, Manager Mergers and Acquisitions, the transaction enables a BEE consortium to become a significant player in the South African hospital industry, without significant anti-competitive effects.

Furthermore, she says “ it is the Commissions view that the transaction does not raise significant public interest issues as it does not have an effect on employment and that the set conditions will offset the overlap in activities which would be as a result of Mvelaphanda/ IDC’s interest in Tshwane Hospitals and Clinix. “

ISSUED BY COMPLIANCE

Information may be obtained from:
Ms. Zodwa Ntuli
Manager: Compliance Division
Tel: (012) 394 3188
Cell: 072 499 0962
Fax: (012) 394 4188

E-mail: