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COMPETITION TRIBUNAL OF SOUTH AFRICA

Case No: LM040Jun15

In the matter between:

TRAXYS AFRICA (PTY)	TD	Primary Acquiring Firm

And

METMAR LIMITED	Primary Target Firm

Panel	: N Manoim (Presiding Member)
: Anton Roskam (Tribunal Member)
: lmraan Valodia (Tribunal Member)

Heard on
Order Issued on Reasons Issued on

: 22 July 2015
: 22 July 2015
: 4 August 2015

Reasons for Decision (Non-confidential)

Approval

[1] 	On 22 July 2015, The Competition Tribunal (''Tribunal") unconditionally approved the acquisition by Traxys Africa (Pty) Ltd ("Traxys") of the entire issued share capital in Metmar Limited ("Metmar'').

[2]	The reasons for approving the proposed transaction follow.

Parties to the transaction

Acquiring firm

[3] 	The primary acquiring firm is Traxys, a company wholly owned by Traxys S.ar.I and ultimately controlled by the Carlyle Group L.P. Traxys does not control any firm but has minor shareholding in Lehating Mining (Pty) Ltd, Siyanda Chrome Smelting Company (Pty) Ltd and Petmin Limited. Traxys and its subsidiaries will hereon be referred to as the Traxys Group.

[4] 	The Traxys Group provides financial and logistical solutions in the ferro-alloy, metal, mineral, mining and energy industries. The Traxys Group trades and sources a diverse range of commodities such as non-ferrous metals, materials for steel mills.

Target firm

[5] 	The target firm is Metmar, a company not controlled by any one firm. Metmar's subsidiaries include Metmar Investments and Resources (Pty) Ltd, Metmar Global (Pty) Ltd, Metmar Trading (Pty) Ltd and Arengo 203 (Pty) Ltd. Metmar and its subsidiaries will hereon be referred to as the Metmar Group.

[6] 	The Metmar Group specialises in the global trade in commodities such ferrous and non-ferrous metals,  minerals,  bulk metals, alloys, soft  commodities,  and  industrial
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carbons.

Proposed Transaction and Rationale

[7]	Traxys  intends to acquire the entire  issued  share  capital of  Metmar.  Post-merger Traxys will control Metmar.

[8]	According to Traxys, the proposed transaction presents growth opportunities to enter

 new mar·kets within the sub-Saharan African regionjmhjjg 
.
Relevant Market and Impact on Competition

[9] 	The Competition Commission ("Commission") considered  the  activities  of  the merging parties to determine the relevant market. It found there is a  horizontal overlap between the merging parties' activities in the international market for physical trading of ferroalloys, non-ferrous metals and ores.

[10] 	The Commission found that  the  merged entity would  have an  estimated  market share of 5% (with an accretion of 1%) in each of the three markets. The Commission is of the view that the market shares are low and that the merged entity post - merger is unlikely to substantially prevent or lessen competition in any of the identified markets.

[11] 	Furthermore, the markets will continue to face constraints from large player such as Glencore International AG, Noble Group, Mertex Canada, Gunvor International B.V and Mercuria Energy Group Limited.

[12] 	The Commission found a vertical relationship as the merging parties in the past 12 months have bought and sold products to each other. Traxys has  purchased chrome from  Metmar accounting for [less than 5%] of the Metmar Group turnover
whilst the  Metmar Group  has  purchased zinc  metal on accounting  for  [less than 5%]  of Traxys annual turnover. The Commissions  is of the view that the amounts
are relatively small and the proposed transaction would not lead to any foreclosure concerns.

[13] 	The Commission accordingly concluded that the proposed transaction is unlikely to substantially prevent or lessen competition in the relevant markets. We agree with this assessment.

Public Interest

[14]	The transaction does not raise any public interest concerns.

Conclusion

[15]		In light of the  above we  concluded  that  the  proposed transaction was  unlikely  to substantially prevent or .lessen competition. Accordingly we approved the  proposed ·

Mr

Mr A Roskam and Prof I Valodia concurring

4 August 2015
DATE

Tribunal Researcher: For the merging parties:

For the Commission:

Moleboheng Moleko
Rick van Rensburg - Edward Nathan Sonnenbergs Inc.
Nolubabalo Myoli and Nompucuko Nontombana