Tribunal approves acquisition of Gijima by Main Street and Yebo Guma
The Competition Tribunal has unconditionally approved the large merger involving the acquisition of Gijima Group Ltd (Gijima) by Main Street 1282 (Pty) Ltd (Main Street) and Yebo Guma Investments (Pty) Ltd (Yebo Guma).
Main Street, a shelf company, and Yebo Guma, an investment holding company, are both ultimately controlled by Robert Wellington Gumede (Gumede). The group of companies controlled by Gumede (the Guma Group) is the largest shareholder in Gijima. The Guma Group is a black-owned, hands-on operations and investment powerhouse which focuses on adding value and initiating growth by means of operational and managerial participation. It focuses on the following sectors: information communication and technology, which includes system integration and services provided through its subsidiary, Gijima; mining resources; tourism, leisure and hospitality; industrial sectors, which include infrastructure development and construction, commercial property development and ownership, residential asset valuation, project management consulting and supply chain management; and energy, including the development of power generation plants, engineering procurement and construction as well as the operation and maintenance of energy plants.
Gijima is an ICT company, operating throughout South Africa and Namibia. It provides application services, infrastructure configuration and implementation, and end-to-end managed outsource services.
In terms of the proposed transaction, Gijima will make a rights offer to shareholders. It is not anticipated that all shareholders will follow their rights. The Guma Group (through Main Street and Yebo Guma) will follow their rights, and although it is not possible to predict the exact future shareholding, it is anticipated that, pursuant to the rights offer, the Guma Group will (through Main Street, Yebo Guma, Guma Tech, Guma Tech Group, Guma Support and Guma Investment Holdings) hold more than 50% of the shares in Gijima.
The Competition Commission, following its investigation, found that the proposed transaction does not alter the market structure as there will be no accretion in market shares and there is no overlap in the activities of the merger parties. Accordingly, the Commission found that the proposed transaction is unlikely to lead to a substantial lessening or preventing of competition in any relevant market. It also found that the proposed transaction raised no public interest concerns. The Commission recommended the unconditional approval of the merger. The Tribunal unconditionally approved the merger.