The tribunal supported the Competition Commission's proposed stipulation that, following the merger, Actom should continue to supply commutators to Transnet Rail Engineering (TRE) - South Africa's largest buyer of commutators - on terms similar to the current arrangements for a period of five years, with the price adjusted for inflation.
Actom manufactures a large range of such components, whereas Savcio imports commutator-packs and assembles them locally. State-owned TRE is responsible for the general maintenance of Transnet's rolling stock. It had opposed the deal, as it was concerned that the merger could result in an increase in the price of commutators in the domestic market. TRE also feared security-of-supply issues, and raised concerns about black economic-empowerment-accredited supplier procurement preferences.
The Competition Tribunal also ruled that common shareholding -- by Kagiso Tiso Holdings in both Actom and Acton Repair Services, which is a competitor of Savcio -- should be removed. The merging parties had already removed common directors and had made a commitment that no common directors would be appointed in future. Actom also opted to continue supplying the open market with its full range of copper wire products at the current price, adjusted for inflation, for a period of two years. The merged entity has 40 operating units, 39 production, service and repair facilities and 26 distribution outlets, it employs 7 500 people, up from 6 000.
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