INMSA is publisher of daily and weekly newspapers including flagship titles such as The Star, the Cape Argus, The Mercury, and the Pretoria News.
Newco is a newly formed entity to be incorporated in the Republic of Mauritius.
The Commission approved with conditions the first part of the merger on 25 July 2013. In that transaction, Sekunjalo and Public Investment Corporation (PIC) acquired 75% and 25%, respectively of the entire share capital in INMSA.
PIC is however, not acquiring control of INMSA as envisaged in the Competition Act; therefore PIC is not regarded as a party to the transaction, the Commission said.
In the second part of the transaction Sekunjalo’s shareholding is reduced from the initial acquisition of 75% in part one of the transaction to 55% shareholding in part two of the transaction.
The Commission said it found no overlap in the activities of the merging parties, namely Sekunjalo, Sekunjalo Investment, CITVC (acting through Newco) and INMSA.
In the initial transaction, the Commission concluded that PIC does not currently exercise control over TMG or Naspers. “As such, the Commission is of the view that it is unlikely that the proposed transaction will result in unilateral and vertical effects in any markets where the TMG, Naspers and INMSA are active.”
The Commission concluded that it is necessary to impose conditions to address the likely competition concerns that may arise due to the cross-ownership of shares by PIC in competing entities.
The conditions imposed by the Commission in the initial transaction aimed to address the possibility of PIC being in control of INMSA in whatever form post-merger and the possible information exchange that could arise as a result of PIC’s shareholding and potential board representation at TMG, Naspers and INMSA.
The conditions sought ensure that the ambiguity with regards to the control of INMSA post-merger is addressed as the shareholders agreements between Sekunjalo and PIC and Sekunjalo and CITVC in respect of INMSA have not been finalised.