PPC's acquisition of 3Q Mahuma Concrete approved

PPC's acquisition of 3Q Mahuma Concrete approved
Published: 14 April 2016


South Africa's Competition Tribunal yesterday approved,without condition, PPC's acquisition of 3Q Mahuma Concrete, the largest independently owned ready-mix concrete supplier in southern Africa.

The Competition Commission had recommended the tribunal approve the acquisition without conditions, but by late yesterday the tribunal had not communicated its decision.

PPC previously disclosed that it planned to acquire the company for a maximum of ZAR183m (US$12.48m). It said the proposed transaction was in line with PPC's new vision announced last November for it to establish a vertically-integrated materials business.

PPC said that the acquisition would complement its Pronto Readymix business that only had a footprint in Gauteng, with this business unit housing PPC's ready-mix, aggregates and related building materials businesses to offer clients end-to-end solutions.

3Q Mahuma has branches in Limpopo, North West, Northern Cape, Mpumalanga and Mozambique.
3Q Mahuma was ultimately controlled by Wilson Bayly Holmes-Ovcon (WBHO) and Brait Societas Europaea.

One of the concerns expressed by a competitor was that PPC and 3Q Mahuma would have market dominance in Gauteng and the North West post acquisition. It was agreed that WBHO would exit as a shareholder in 3Q Mahuma after the acquisition, giving it no influence on the business operations.

The commission's Zanele Hadebe said there were many ready-mix concrete players in the Gauteng market and the acquisition was unlikely to make PPC a dominant player in the province. She said PPC did not have any ready-mix concrete operations in the North West and only 3Q Mahuma had operations there.

Ms Hadebe said the commission could not find evidence that the transaction was likely to raise competition concerns or raise public interest concerns in terms of job losses.

Rick van Rensburg, the attorney appearing for merging parties, said although most ready-mix plants could be moved, the acquired plants were not true mobile units in the sense that they could be hooked behind a truck and driven away.

Charl Marais, the managing director of 3Q Mahuma Concrete, said it had between 17-19 ready-mix concrete plants but not all were operational.