The matter involved two related but separate and divisible transactions. The first and principal transaction involved the acquisition by Oceana Group Limited (Oceana) of fishing businesses, interests, shares and assets from Bato Star Fishing (Proprietary) Limited (Bato Star), Phambili Fishing (Proprietary) Limited (Phambili) and from a number of companies within the African Marine Products (Proprietary) Limited group (AMP). The second transaction involved the sale of the cold storage business of V&A Cold Store (Proprietary) Limited (V&A), a company within the AMP group, to Commercial Cold Storage (Proprietary) Limited, an Oceana subsidiary.
The main transaction comprised the sale of multiple businesses, assets, shares and fishing interests across the hake, sole, south coast rock lobster and horse mackerel fishing industries. This gave rise to significant complexity as the dynamics of each fishing sector had to be assessed in order to gauge the impact of the transaction on competition. Additional complexity in the transaction was due to the fact that the transfer of fishing rights is subject to approval from the Department of Agriculture Fishing and Forestry, which shares concurrent jurisdiction with the competition authorities. Added caution was required in the handling of the matter as the fishing industry, and Oceana in particular, had come under close scrutiny by the competition authorities following the Competition Commission's (Commission) recent prohibited practices investigation into the pelagic fishing industry.
The Commission's major concerns regarding employment and the rights of third parties to negotiate contracts for the catching of their fishing quotas post-merger were dealt with in the conditions imposed on the transaction. The conditions have been accepted by the merging parties.
The cold storage transaction involved the sale of V&A's cold storage facilities which are located at the Cape Town quayside. The cold storage acquisition amounted to a small transaction and did not require approval, but was nonetheless notified as the parties anticipated that the Commission would require notification given the nature of the transaction. In its assessment of the competitive effects, the Commission adopted a narrow construction of the market which led it to conclude that the merged entity would be dominant and accordingly imposed behavioural conditions to address these concerns. The parties, however, contend that the market was not properly defined and are seeking to challenge the conditions imposed.