The Competition Tribunal (the Tribunal) has conditionally approved the transaction whereby K2020211444 (South Africa) (Pty) Ltd (“K2020”), a wholly owned subsidiary of Truworths Limited (“Truworths”), will acquire the business (assets and liabilities) of Barrie Cline Clothing (Pty) Ltd (Barrie Cline) as a going concern. Upon implementation of the merger, K2020 will exercise sole control over Barrie Cline.
Although the merger parties provided an undertaking that the transaction will not result in any merger-specific retrenchments, the Tribunal has approved the merger with an employment condition i.e. the acquiring firm shall not retrench any employees for a period of one (1) year from the merger implementation date, as a result of the merger.
K2020, a wholly owned subsidiary of Truworths, is a special purpose vehicle and does not have any business activities.
Truworths is a wholly owned subsidiary of Truworths International Group Limited (“Truworths International Group”). In addition to Truworths, Truworths International Group owns multiple other companies, such as Truworths Botswana (Pty) Ltd and Truworths (Namibia) Limited.
The Truworths Group is an investment holding and management company that invests in companies that are leading retailers of fashion clothing, footwear, related merchandise and homeware. The Truworths Group operates through multiple stores in South Africa, Africa, the United Kingdom and Europe.
Barrie Cline manufactures (through outsourced arrangements) and supplies women’s outerwear apparel exclusively to Truworths from a central head office and warehouse in Cape Town.
It arranges for the manufacture of lady’s outerwear apparel through outsourced arrangements with cut, make and trim operators (“CMTs”). CMTs are factories that cut, make and trim fabrics into clothing.
The Commission, which assesses large mergers before referring them to the Tribunal for a decision, found that the proposed transaction did not raise any competition or public interest concerns and recommended unconditional approval. However, as previously mentioned, the Tribunal thereafter imposed an employment condition. The merger was therefore approved subject to a condition.