NewCo acquires Consolidated Steel Industries Proprietary Limited (CSI)

The Competition Commission has conditionally approved the proposed merger whereby NewCo intends to acquire CSI.

NewCo is a private company and is wholly owned by Rockwood Private Equity Proprietary Limited (Rockwood). The shares in Rockwood are held by four individuals. Neither NewCo nor Rockwood have any shareholding by historically disadvantaged persons (HDIs), nor do they have other BEE credentials.

NewCo was incorporated as a special purpose vehicle to acquire the Global Roofing Solutions Division. Accordingly, NewCo does not provide any products or render any services. The business of Rockwood is to manage and advise private equity investment funds.

The shares in CSI are held by Tiso Blackstar Holdings SE (100%), which is in turn wholly owned by Tiso Blackstar Group SE. CSI comprises two divisions, being the GRS Division and the Stalcor Division. Of relevance to the proposed transaction is the GRS Division.

CSI controls the following firms: Global Roofing Solutions Zambia Limited, GRS Botswana and Country Roofing Namibia.

The GRS Division is principally a manufacturing business servicing the metal roofing and roofing accessories market in South Africa. The primary products of the GRS Division include steel roofing profiles and roofing accessories (clips), steel, decking profiles and roof sheeting products. The Commission found that the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in any relevant markets.

Regarding public interest, the Commission found that the proposed transaction is likely to result in a reduction in ownership by historically disadvantaged persons and that the merger may raise employment concerns.

After positive engagement with the merger parties, the acquiring firm agreed to a condition that it introduces a B-BBEE shareholding in the merged entity within a certain period. To alleviate any employment concerns, the merging parties agreed to afford retrenched employees the opportunity to be considered for re-employment when opportunities arise within the merged entity.