GCR 100 - 17th Edition

South Africa

10 January 2017

South Africa

South Africa’s busy competition enforcer and courts have kept lawyers and practices on the go, even as they work on matters further afield on the continent.

Elite

With the promotion of Judd Lurie in March 2016, the deep bench at BOWMAN GILFILLAN’s competition practice now holds 11 partners, nine associates and a former competition commission economist. Led by Derek Lotter, Bowman emphasises relationships with local counsel and regulators across Africa, particularly in Kenya and Uganda where the firm fields additional antitrust lawyers.

Lotter and fellow partners Robert Legh and Claire Reidy counselled SABMiller across Africa on the company’s role in a consolidation of non-alcoholic beverage bottling operations to create Coca-Cola Beverages Africa, which required filings in South Africa, the Common Market for Eastern and Southern Africa (COMESA), Kenya, Tanzania, Namibia and Botswana. Even more prominently, they acted for SABMiller in its tie-up with Anheuser-Busch InBev, notifying the blockbuster merger in South Africa, Botswana, Ethiopia, Kenya, Namibia, Swaziland, Tanzania, Malawi, Zambia and Zimbabwe. In another complex deal, the firm has acted for Country Bird in its proposed hostile takeover of rival chicken producer Sovereign Food Investments, applying for and receiving the Competition Commission’s permission to file separately. Bowmans also successfully defended against Sovereign’s application to the Competition Tribunal to block Country Bird from voting its shares in Sovereign until it had secured competition clearance.

On the behavioural side, partner Lucinda Verster led representation of Nationwide Airlines in its abuse of dominance and third party damages claims against South African Airways; the latter settled shortly after trial began, while the former obtained a favourable judgment in August 2016 from the South Gauteng High Court for 104 million rand. Lotter and partner Maryanne Angumuthoo, along with Reidy, counselled Afrox Oxygen regarding an October 2015 dawn raid over an alleged cartel in liquefied petroleum gas cylinder deposits. Lurie acted for Glasfit with regard to a March 2016 dawn raid over allegations of price-fixing and market division in the market for automotive glass. The firm also advises in the three market inquiries in the private healthcare, grocery retail and LPG sectors.

In June 2016, Jocelyn Katz took over as head of competition at ENSAFRICA from Lee Mendelsohn, who is now the firm’s chief operating officer and no longer spending as much time on antitrust matters. Katz is joined in the group by seven other directors, plus one competition economist and five senior associates.

The US$106 billion beer merger of Anheuser-Busch InBev/SABMiller, in which ENSafrica helped to represent the buyer in multiple African jurisdictions, involved complex negotiations with the South African government beyond the competition authority, due to public-interest concerns that touched on agriculture and economic development. Along with firm chairman Michael Katz, partner Mark Garden marshalled a multidisciplinary team of advisors and kept the merger hearing in South Africa to only three days, with the deal approved by the Competition Tribunal in June 2016 based on conditions ranging from contracts with barley farmers to the supply of bottle caps. In another blockbuster deal, Garden advised Dell on its US$67 billion acquisition of EMC, ultimately securing unconditional merger approval in South Africa for the largest-ever information technology deal. Partner HB Senekal acted for Sibanye Gold’s subsidiaries Bermuda and Sibanye Rustenburg Platinum Mines in buying Aquarius Platinum and the Rustenburg Mines. Given the importance of mining for labour in South Africa, the mergers required careful handling of job loss effect on the public interest.

The Competition Commission of South Africa is studying the private healthcare and liquid petroleum gas sectors; ENSafrica represents multiple clients in each probe. Mendelsohn, Justin Balkin, Katz, Natalia Lopes and Richardt van Rensburg act for Discovery Health, Bankmed and Universal Healthcare Administrators as the commission panel demands information and interrogates executives at public hearings. Mendelsohn and economist Lizél Blignaut are counselling Afrox, the largest vertically integrated provider, and Totalgaz in the LPG market inquiry. Totalgaz recently acquired Kaya Gas’s LPG assets, and has been the subject of a dawn raid in a commission investigation of alleged price fixing of cylinder deposits.

Last but not least in the triumvirate of established Elite practices, WEBBER WENTZEL lost three lawyers – including partner Lesley Morphet – to other firms in the past year, but added partner Mmadika Moloi and promoted Christopher Kok. The firm maintains a formal alliance with Linklaters, and competition chair Daryl Dingley has said his firm’s strategy is to partner with carefully chosen local firms rather than open offices across the continent.

In that vein, the firm advised Anheuser-Busch InBev on all merger control considerations and was responsible for all 10 competition notifications in Africa – drafting the filings, and coordinating with local counsel – for the brewing giant’s purchase of SABMiller. Webber Wentzel gained unconditional approval from the Competition Commission in September 2016 for Revlon’s proposed takeover of Elizabeth Arden, and from the Competition Tribunal in early 2016 for Al Noor Hospitals’ merger with Mediclinic International, South Africa’s biggest private hospital group. On the other side of merger work, Webber Wentzel acted for Dimension Data and its subsidiary Internet Solutions in opposing the Telkom/BCX and Vodacom/Neotel tie-ups; it got the former conditioned by the Competition Tribunal, and the latter abandoned.

The firm represented Comair in claiming damages in the amount of approximately 1.2 billion rand from South African Airways for the airline’s incentive schemes with travel agents, one of the first follow-on damages claims to be pursued in South Africa. Webber Wentzel is providing pay-TV provider MultiChoice with regulatory advice, including competition law, in multiple jurisdictions across Sub-Saharan Africa.

It’s now just CLIFFE DEKKER HOFMEYR since August 2015, when the firm ended its formal alliance with DLA Piper, which opened its own South Africa office in early 2016. Lawyers at Cliffe Dekker are called “very good” by their peers, with new practice head Chris Charter singled out for special praise. The departure of his predecessor Nick Altini for Baker & McKenzie does not seem to have slowed work too much, and the firm picked up partner Lara Granville from Norton Rose Fulbright in September 2016. Charter acts for Massmart in a complaint to the Competition Tribunal about supermarkets’ exclusivity provisions in shopping mall lease contracts, which prevent the Walmart-owned retailer from competing with them in the sale of groceries.

The firm continues to represent Mediclinic in the Competition Commission’s inquiry into the private healthcare market, but also advised the private hospital group in its deal with Al Noor Hospitals. Charter and Albert Aukema acted for The Coca-Cola Company in obtaining merger approval in various jurisdictions for the creation of Coca-Cola Beverages Africa – an amalgamation of the company’s Coca-Cola bottling assets with those of SABMiller, Coca-Cola Sabco and Coca-Cola Shanduka Beverages – and the company’s acquisition of a number of SABMiller non-alcoholic brands, for US$260 million. Longstanding client Vodacom took advice from Aukema and Andries le Grange in acquiring Altech Autopage’s subscriber base, which Saicom opposed; the Tribunal approved the deal with employment related conditions. Aukema and le Grange also teamed up for “MotoVantage”, a joint venture between WesBank and Hollard, which some industry participants opposed because of WesBank’s high market share in the vehicle finance space. Ultimately, the deal was approved with behavioural conditions regulating WesBank’s conduct in this market. Natalie von Ey secured unconditional approval for the horizontal merger between Transpaco and the business of East Rand Plastics.

Anthony Norton is a formidable player in the competition sector, according to other South African lawyers. In 2016, the eponymous founder and managing partner of NORTONS INCORPORATED lost two associates, but added one senior associate and two economists hired from the South African enforcer. The firm remains busy with the healthcare inquiry and the quieter sector study of liquefied petroleum gas, as well as representation of Pick’n’Pay in the grocery retailer sector inquiry.

Recent merger notifications include representing Anglo American in the disposal of its Rustenburg mines to Sibanye; Western Digital in its €16.8 billion purchase of rival SanDisk; Mpact on its acquisition of Remade Holdings; Diageo, Heineken International and Namibian Breweries in restructuring joint venture arrangements in South Africa; Acciona in buying Nordex; Investec on its increased stake in Ferro South Africa, and Ferro on its acquisition of Revertex South Africa, conditioned on divesture; and Southern Sun’s acquisition of a majority shareholding in the REIT-listed Hospitality Property Fund.

Former practice head Heather Irvine left NORTON ROSE FULBRIGHT for Falcon & Hume in May 2016, but others have stepped up, with Marianne Wagener now leading the group of five partners. Deals include Barclays Africa’s buying an insurance business in east Africa, with unconditional approvals from COMESA and Tanzania, and conditional clearance in Kenya. Along with Cliffe Dekker Hofmeyr, the firm assisted third party Distell in its submissions to the Competition Tribunal to ensure favourable conditions on the AB InBev/SABMiller merger. Other deals of note include the City of Johannesburg’s acquisition of an operating broadband network from CitiConnect Communications BWired; General Cables’ sale of copper rod maker Zamefa to Reunert, which has obtained unconditional approvals in South Africa, Kenya and Botswana; and the divestiture of Vermaak & Vennote to Pathcare, which in an environment of Competition Commission scrutiny of the healthcare industry led to an in-depth investigation, resubmission of the filing and conditional approval.

Outside the merger realm, Norton Rose got Bridgestone corporate leniency in the Competition Commission’s price-fixing complaint against South African tyre manufacturers, and acted for New Era Packaging during a March 2016 dawn raid that was part of an investigation into the packaging industry in South Africa. The firm is also counseling the South African Council for Medical Scheme in two complaints to the competition authorities regarding alleged price-fixing by the South African Medical Association and associations of doctors – resulting in several rounds of litigation in the Competition Tribunal, Competition Appeal Court and the High Court, and the tribunal’s order that the merits hearing must proceed.

Thanks in part to the acclaimed M&A department at WERKSMANS ATTORNEYS, the competition practice can count on a heavy deal flow from a wide variety of clients. With 10 partners – seven of whom have been in competition work for more than 16 years – it rates as one of the largest and most consistent practices in South Africa. Practice head Paul Coetser regularly represents Telkom, the largest fixed-line telecommunications company in South Africa. He assisted and Ahmore Burger Smidt represented MTN in blocking a proposed merger between Neotel and the South African subsidiary of Vodafone Group. Coetser, Petra Krusche and Graeme Wickens also acted for clients who successfully intervened in AB InBev/SABMiller and the Coca-Cola bottling consolidation to secure favourable conditions.

Partners Rudolph Raath and Amanda Armstrong continue to defend Media24 from CompCom’s first predatory pricing accusation when it cut newspaper advertising rates as the case wends its way through the courts, and Armstrong and partner Paul Cleland defend Multichoice against a rival’s exclusionary conduct complaint. On the other side, the firm acts for plaintiffs in follow-on damages actions against road builders and construction cartels. Partner Irma-Dalene Gouws counsels physicians in the healthcare inquiry and Petra Krusche counsels Shoprite Checkers in the supermarket inquiry. Partner Dominique Arteiro is defending the South African Medical Association against price-fixing accusations from the Council for Medical Schemes.

With the arrival of partner Nick Altini in February 2016, BAKER & MCKENZIE’s competition practice has increased its caseload from both new and existing clients. Headed by Vani Chetty, who founded the office with South Africa’s first boutique competition law practice, the team also added Derrick Bowles – previously senior case manager at the South African Competition Tribunal – in August 2016, and senior associate Leana Engelbrecht from Cliffe Dekker Hofmeyr. The firm represents a confidential client in the private healthcare market inquiry, and SA Airlink, a local passenger airline, regarding a complaint of alleged excessive pricing. The practice advised Sun International in its three-to-two casino merger with Peermont Global, which was ultimately abandoned for commercial reasons; Pioneer’s acquisition of a controlling stake in FutureLife Health, which Kellogg unsuccessfully opposed by Kellogg; and the local leg of the global FedEx/TNT deal, in which Baker & McKenzie acts for FedEx worldwide. The South African competition practice beat back public interest concerns about employment to win unconditional clearance.

FASKEN MARTINEAU grew in South Africa with the addition of partner Sue Collier, who joined from Hogan Lovells. Practice chair Stephen Langbridge, supported by associates Neil Mackenzie and Ingrid Rogers, stayed busy in matters that included representing ArcelorMittal South Africa in litigation over cartel allegations in the long steel and flat steel markets and abuse of dominance in the wire rod market. As GCR 100 went to press, the Competition Tribunal confirmed the Competition Commission’s 1.5 billion rand fine on ArcelorMittal, but decided to exclude price discrimination charges brought by a customer of the steel manufacturer. Ongoing cartel defences include claims against the South African Petroleum Industry Association – which was hit by the first-ever dawn raid without a warrant in South Africa – for its role in the alleged fixing of cylinder deposit fee in the liquid petroleum gas market, and against Basil Read for alleged collusive tendering in the construction industry for 2010 World Cup stadia. Langbridge is also local counsel to Dow Chemical in its mega-merger with DuPont, and to both Alstom Transport and Commuter Transport & Locomotive Engineering in their rail transport tie-up.

Firm

Head(s) of competition

Size

Who’s Who Legal nominees

Clients

Elite

Bowman Gilfillan

Derek Lotter

11 partners

9 associates

1 economist

Derek Lotter

Tamara Dini

Robert Legh

Jean Meijer

Microsoft, Continental AG, SABMiller, Vodacom, Nestlé, TRW, KPMG, Sasol, Nationwide Airlines

ENSafrica

Jocelyn Katz

8 directors

1 economist

5 senior associates

Justin Balkin

Mark Garden

Jocelyn Katz

Lee Mendelsohn

AB InBev, BHP Billiton, British American Tobacco, Dell, Engen, Imerys, KLM, Nestlé, Nokia, Roche, Sasol, South African Airways, Standard Bank, Telkom, Teva, Total SA

Webber Wentzel

Daryl Dingley

8 partners

5 associates

5 candidate attorneys

Desmond Rudman

Martin Versfeld

Robert Wilson

Lafarge, Oceana, Unilever, Multichoice, Coca-Cola, MTN, Wal-Mart, AECI, South Ocean Electric Wire Company

Highly recommended

Cliffe Dekker Hofmeyr

Chris Charter

6 directors

1 senior associate

3 associates

Chris Charter

The Coca-Cola Company, Massmat, Brait SE, Investec Equity Partners, South African Broadcasting, Vodacom, Fidelity Security, Mediclinic, Ascendis, Akacia

Nortons Incorporated

Anthony Norton

6 directors

6 associates

Anthony Norton

John Oxenham

Anton Roets

Premier Foods, Afrisam, Anglo American, Barclays, Heineken South Africa, Tsogo Sun, Aspen, Sasol, BP Southern Africa, Mercedes-Benz, Netcare

Norton Rose Fulbright

Marianne Wagener

5 partners

3 associates

None

Distell, General Cables, Barclays Africa, Bridgestone South Africa, Chevron South Africa, Rhodes Food, Wilmar International, New Era Packaging, Afrisam, Cell C

Werksmans Attorneys

Paul Coetser

10 partners

6 associates

Paul Cleland

Paul Coetser

Pieter Steyn

Media24, MultiChoice, Telkom, MTN, South African Medical Association, Shoprite Checkers

Recommended

Baker & McKenzie

Vani Chetty

2 partners

2 senior associates

2 associates

Nick Altini

Vani Chetty

FedEx, Redefine, Group Five, Unilever, Daimler, Pioneer Foods, Sun International, Famous Brands, Reckitt Benckiser, Growthpoint Properties, Vitol, Aveng

Fasken Martineau

Stephen Langbridge

2 partners

2 associates

Stephen Langbridge

Alstom, ArcelorMittal, Aspen Nutritionals, Basil Read, Duferco Steel Processing, GlaxoSmithKline, Johnson & Johnson, LafargeHolcim, Dow Chemical

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