Tribunal approves merger of Steinhoff subsidiary

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Cape Town – The Competition Tribunal said on Monday it has conditionally approved a merger whereby Unitrans Automotive, wholly owned by troubled SA retail group Steinhoff International Holdings, acquires Action Ford’s vehicle dealership business.
 
The merging parties have given an undertaking that there would be no retrenchments for a period of two years from the implementation date.

In June last year Steinhoff consolidated and restructured the Unitrans Automotive Group’s operations by moving all automotive divisions and companies into a single structure.
 
Unitrans Automotive controls a number of entities and is active in the sale of new and pre-owned vehicles, parts and accessories and after-market service.

In addition, Unitrans Automotive also assists customers with acquiring consumer credit, insurance products, fleet management services and car rental. Its dealerships consist of various vehicle brands, including Ford.
 
Action Ford controls no other firm and operates five Ford vehicle dealerships located in Gauteng, North-West and the Western Cape. Action Ford only retails Ford vehicles.
 
Its key services consist of the sale of new, pre-owned vehicles, a service department and parts department. It also acts as an intermediary by offering customers access to financial services related to the purchase of vehicles.

In 2011 the tribunal approved a transaction between furniture groups JD Group and Steinhoff International Holdings in which JD Group acquired all the shares in and claims against the SA retail assets of Steinhoff, namely Unitrans Auto and Steinbuild.

Last year, when Steinhoff announced the listing of its African retail business – Steinhoff African Retail Limited (STAR) – on the JSE, it was announced that the board decided to exclude Unitrans Automotive from the listing due to its different characteristics and growth drivers compared to the other African assets.

Bloomberg reported last week that Steinhoff says it has secured enough funds to keep going for now and could start discussions with a broader group of creditors.

Steinhoff announced that it has arranged new credit lines for units in the UK, US and France and agreed to restructure its Austrian division.

The company has also agreed with SA lenders to repay $248m owed to entities outside the country – to be funded by proceeds from the sale of shares in financial services firm PSG.

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