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COMPETITION TRIBUNAL APPROVES FINRO ACQUISITION

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Masscash, a division of Massmart Holdings, has been notified that the Competition Tribunal has unconditionally approved the proposed merger between Masscash and Finro Enterprises, trading as Finro Cash & Carry. Both businesses are involved in the wholesale grocery market in Port Elizabeth. The merger notification was originally lodged with the Competition Commission on 19 December 2008 and on 21 May 2009 the Commission recommended to the Competition Tribunal that the merger be prohibited.

After the merger hearing, the Competition Tribunal ultimately concluded that the merger will not lead to a substantial prevention or lessening of competition in the wholesale grocery market in Port Elizabeth. The Tribunal’s reasons for its decision have not been released and will be handed down in due course.

On the Tribunal’s decision, Robin Wright, Masscash Divisional Chief Executive, says: “We are pleased with the result and believe that the correct decision has been reached. This decision provides support for our position that the Finro acquisition will enable Masscash to formulate an even more competitive offering in the Port Elizabeth market, for the benefit of independent traders and all of our customers.”

ENDS

Media release issued by:
Brunswick Group LLP – 011 502 7300
Cecilia de Almeida — 083 325 9169
Julia Scheffer — 082 802 4265

Media queries should be addressed to:
Brian Leroni
Group Corporate Affairs Executive
Massmart Holding Ltd
011 517 0000

Notes to Editor

  • On 19 December 2008, the merger between Masscash Holdings (Pty) Ltd and Finro Enterprises (Proprietary) Limited t/a Finro Cash & Carry was lodged with the Competition Commission. In terms of the proposed merger, Masscash sought to acquire a 75% interest in the business of Finro. Masscash, through its Weirs store, and Finro are both involved in the wholesale grocery market in Port Elizabeth.
  • On 21 May 2009 the Commission recommended to the Competition Tribunal that the proposed merger be prohibited, primarily on the grounds that the loss of competition between Weirs and Finro is likely to result in higher prices for customers of those businesses in Port Elizabeth. A pre-hearing was held on 3 June 2009, at which a timetable for filing submissions was agreed as well as the dates for the merger hearing. The merger hearing before the Tribunal was held during the last 2 weeks of August and closing argument was heard on 8 September.
  • Massmart Holdings is a managed portfolio of nine wholesale and retail chains, and one buying group, each focused on high-volume, low-margin, low-cost distribution of mainly branded consumer goods for cash. The group operates in 14 countries in sub-Saharan Africa through four divisions comprising 243 stores and 574 buying Group members. Massmart’s wholesale and retail brands enjoy high recognition and include Makro, Game, Dion Wired, Builders Warehouse, Builders Express, Builders Trade Depot, CBW, Jumbo Cash and Carry and the Shield buying group.
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