THEE - The Competition Commission - Kansai`s acquisition of Freeworld

THEE - The Competition Commission - Kansai`s acquisition of Freeworld           
approved with conditions                                                        
PRESS RELEASE                                                                   
19 April 2011                                                                   
KANSAI`s ACQUISITION OF FREEWORLD APPROVED WITH CONDITIONS                      
The Competition Commission yesterday approved the proposed acquisition of       
Freeworld Coating Limited ("Freeworld") by Kansai Paint Co. Limited             
("Kansai") with conditions that address competition and public interest         
concerns that arise from the transaction. Both parties are active in the        
market for the supply of automotive coatings. Freeworld is also active in the   
market for decorative coatings through the Plascon brand.                       
The automotive coatings market is a concentrated market with high barriers to   
entry and linkages between the various market players through joint ventures.   
The Commission found that the merger would have re-enforced concentration in    
the South African market and would create a forum for collusion between         
Kansai and du Pont (another multinational automotive paint company) through     
the joint venture that currently exists between Freeworld and du Pont. In       
order to address these concerns, the Commission requires that Kansai divest     
the entire automotive coatings business of Freeworld, which includes its        
shareholding in the du Pont joint venture.                                      
In addition, the merger approval was subject to the following public interest   
conditions that were raised during the Commission`s investigation:              
-    There will be no retrenchments for a period of three years following the   
merger                                                                      
-    Kansai will continue to manufacture decorative coatings for a period of    
    10 years, and will establish an automotive coatings manufacturing           
    facility in South Africa within 5 years                                     
-    Kansai will invest in South African research and development in            
    decorative coatings                                                         
-    Kansai will implement a BEE transaction within 2 years.                    
Commissioner Shan Ramburuth said that "collectively, these conditions address   
any anti-competitive harm that would have resulted from the merger and would    
ultimately increase South Africa`s manufacturing capacity in the paint          
market."                                                                        
END                                                                             
Further Information:                                                            
Maarten van Hoven, Manager: Mergers & Acquisitions                              
012 394 3295/083 412 7885/ maartenv@compcom.co.za                               
Date: 19/04/2011 13:37:09 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department.                  
The SENS service is an information dissemination service administered by the    
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or            
implicitly, represent, warrant or in any way guarantee the truth, accuracy or   
completeness of the information published on SENS. The JSE, their officers,     
employees and agents accept no liability for (or in respect of) any direct,     
indirect, incidental or consequential loss or damage of any kind or nature,     
howsoever arising, from the use of SENS or the use of, or reliance on,          
information disseminated through SENS.