Tribunal cements PPC acquisition of 3Q Mahuma

PPC's acquisition of 3Q is expected to complement its Pronto Readymix business. File picture: Supplied

PPC's acquisition of 3Q is expected to complement its Pronto Readymix business. File picture: Supplied

Published Apr 14, 2016


Johannesburg - The Competition Tribunal yesterday approved without conditions the acquisition by listed cement and lime producer PPC 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.

Read: PPC wants to expand ready-mix production

PPC previously disclosed that it planned to acquire the company for a maximum of R183 million.

It said the proposed transaction was in line with PPC’s new vision announced last November for the company to become a world-class supplier of materials and solutions into the basic services sector and 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 yesterday that they could not find evidence to support the claim that the transaction was likely to make PPC a dominant player in Gauteng and the North West.

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.

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.

Ready-mix plants

Andrei Wessels, the chairman of the tribunal panel hearing the matter, asked a number of questions related to the mobile ready-mix plants owned by 3Q Mahuma and PPC, including whether and how quickly they could be moved across provinces.

Rick van Rensburg, the attorney appearing for merging parties, said although most ready-mix plants could be moved, they 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 and 19 ready-mix concrete plants but not all were operational, while all could be moved but this took between four and six weeks.

Marais said the majority of the firm’s plants were commercial plants that were established to supply a range of small and large clients in a region for about five years.

He said the majority of the plants in the outer lying regions were based in the mining belts, such as the platinum, iron ore and coal belts.

Marais said part of the company’s strategy was to assist especially on larger projects with project specific plants, such as at the Mall of Africa and Menlyn Maine developments.


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