AEEI’s acquisition of Saab Grintek approved

THE COMPETITION Tribunal has approved the acquisition of Saab Grintek Technologies (SGT) by African Equity Empowerment Investment (AEEI), a JSE-listed company controlled by Sekunjalo Investment Holdings, without conditions.

The Competition Commission’s Yolande Okharedia told a tribunal hearing yesterday that AEEI intended to acquire 100 percent of the issued shares of SGT. Okharedia said the activities of SGT included radio transmission services, power technologies and customer solutions used, among others, in military applications.

She said in considering the proposed merger, the commission concluded that the transaction did not result in a horizontal or vertical overlap and was unlikely to substantially prevent or lessen competition or raise any other public concerns.

Okharedia added that the employer representatives of the merging parties were notified about the transaction and confirmed in writing that the translation would not result in any job losses or have any negative impact on employment.

She said the commission therefore recommended the proposed transaction be approved without conditions.

Imraan Valodia, a member of the tribunal panel hearing the case, questioned whether there was any potential overlap into Sekunjalo’s media interests.

Wiri Gumbie, appearing for the commission, said SGT was more involved in infrastructure and provided telecommunication towers for various cellphone companies and power supplies for that infrastructure plus other infrastructure and user applications.

Gumbie said SGT’s activities were unlikely to have any overlap to any of the group’s media interests.

Vincent Scholtz, the chief executive and president of Saab Grintek Technologies, said the company was not involved at all in the media market. Scholtz said their target market was the telecommunications operators, including Telkom, Vodacom, Cell C and MTN, and SGT provided them with services and products that went into their networks.

“We don’t get involved in their own operations and what they sell and re-sell of that capacity. We are just purely an equipment and service supplier,” he said.

Scholtz added that the market for supplying these products and services to the telecommunications companies was dominated by the big international houses, with Huawei, Nokia and Ericsson the primary players.

Out of a total market of about R25 billion being spent by the telecommunications companies, these dominant players obtain 82 to 85 percent of the total, he said.

Scholtz said there were a number of players like SGT that provided niche products and services or field services that augmented what the dominant players were doing.

He said it was a hugely competitive market and SGT sometimes competed with Huawei with original equipment manufacturer products they had access to, but did not have their own technology and only sold other people’s products.