Tribunal gives Bidvest Auto’s Dekra deal the green light

The Competition Tribunal has given the go-ahead for Bidvest’s planned acquisition of German supplier of roadworthy tests Dekra Automotive.

The tribunal said this week that it had approved the proposed deal with conditions relating to the procurement and supply of services, as well as the exchange of competitively sensitive information.

Bidvest’s acquisition of Dekra Automotive through its Bidshelf 93 subsidiary, to be renamed Bidvest Automotive Holdings, brings it a step closer to fully realising an expanded diverse, niche service offering in its automotive segment. 

The Competition Commission gave the transaction the green light in April, with conditions as the commission flagged input and customer foreclosure concerns.

Bidvest Auto, controlled by JSE-listed Bidvest group, sells new and used passenger vehicles, light commercial vehicles and heavy commercial vehicles in SA.

Dekra provides automotive testing, inspection and certification services through vehicle inspection and testing stations.

To address the commission’s concerns, Bidvest undertook to continue procuring services from existing providers and other third parties, including small to medium enterprises and historically disadvantaged people for five years. Similarly, Dekra would also continue to provide services to Bidvest’s rivals, for five years as part of the agreed conditions.

Additionally, the parties promised to implement appropriate information barriers to prevent any flow of competitively sensitive information.

This week, the tribunal approved the large merger, with the previous conditions upheld. Details on the acquisition price were not immediately available.

Founded three decades ago, Bidvest has seven divisions operating in SA, the UK, Spain, Ireland and Australia. They span services, freight, consumer and commercial products, financial services and automotive retailing.

In response to SA’s economic weakness, the industrial conglomerate has been looking abroad for growth and expansion, particularly in its hygiene and facilities management businesses.

Capital has been invested heavily in key areas to ensure growth and internationalise niche services. 

In 2023, it announced the expansion of its automotive division, in a bid to capitalise on the second-hand vehicle market in SA.

Carla Seppings, CEO of Bidvest’s automotive business, emphasised diversification as a key strategic focus area being pursued actively in response to noticeable shifts in the SA automotive market, where customers are moving towards more affordable brands.

Subsequently, the JSE-listed firm with an R94bn market capitalisation, has inked several deals that are in line with its scheme to bring scale and diversity to its automotive business, including the launch of Cubbi — its independent used-vehicle business taking on the older used-vehicle market — giving it exposure to a market segment Bidvest McCarthy did not have previously.

Bidvest’s share price was little changed on Thursday, closing at R276.89. It has gained just more than 9% since the beginning of 2024.

gumedemi@businesslive.co.za