AFGRI Agri Services (Pty) Ltd and Another v Certain Assets and Businesses by Hinterland Holding (Pty) Ltd and its Subsidiaries and Another (LM083Aug20) [2020] ZACT 30 (20 October 2020)

AFGRI Agri Services (Pty) Ltd and Another v Certain Assets and Businesses by Hinterland Holding (Pty) Ltd and its Subsidiaries and Another (LM083Aug20) [2020] ZACT 30 (20 October 2020)

The Tribunal found that the proposed demerger would not result in a substantial prevention or lessening of competition, as there was no horizontal overlap and only a minor vertical overlap that did not raise foreclosure concerns. The competitive landscape remained unchanged, with sufficient alternative suppliers and competitors. The Tribunal accepted the parties' undertaking that no retrenchments would occur and imposed a two-year moratorium on retrenchments to safeguard employment. The transaction did not reduce the shareholding of historically disadvantaged persons, as B-BBEE partners' interests were maintained or increased. The Tribunal concluded that the transaction was consistent...

Citation
[2020] ZACT 30
Parties
Applicant: AFGRI Agri Services (Pty) Ltd; Applicant: Senwes Limited; Respondent: Certain Assets and Businesses by Hinterland Holding (Pty) Ltd and its Subsidiaries; Respondent: Hinterland Holdings Proprietary Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
20 October 2020
Case Number
LM083Aug20
Procedural Posture
Merger Application / Conditional Approval
Outcome
Merger conditionally approved subject to a two-year moratorium on retrenchments and compliance monitoring.
Judges
M Mazwai, E Daniels, A Roskam
Legal Topics
Merger Control, Public Interest Conditions, Employment Protection, Broad Based Black Economic Empowerment
Competition Law Commercial and Corporate Merger Control Public Interest Conditions Employment Protection Broad Based Black Economic Empowerment

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 3 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

AFGRI Agri Services (Pty) Ltd

Applicant

Senwes Limited

Applicant

Certain Assets and Businesses by Hinterland Holding (Pty) Ltd and its Subsidiaries

Respondent

Hinterland Holdings Proprietary Limited

Respondent

Procedural Posture

Merger Application / Conditional Approval

Legal Issues

  1. 1 Whether the proposed demerger between AFGRI and Senwes will substantially prevent or lessen competition in the relevant markets.
  2. 2 Whether the transaction will have adverse effects on employment and public interest, including the position of historically disadvantaged persons.
  3. 3 Whether the conditions imposed adequately address concerns raised by unions regarding retrenchments and bargaining council participation.

Ratio Decidendi

The Tribunal found that the proposed demerger would not result in a substantial prevention or lessening of competition, as there was no horizontal overlap and only a minor vertical overlap that did not raise foreclosure concerns. The competitive landscape remained unchanged, with sufficient alternative suppliers and competitors. The Tribunal accepted the parties' undertaking that no retrenchments would occur and imposed a two-year moratorium on retrenchments to safeguard employment. The transaction did not reduce the shareholding of historically disadvantaged persons, as B-BBEE partners' interests were maintained or increased. The Tribunal concluded that the transaction was consistent...

Court Disposition

Merger conditionally approved subject to a two-year moratorium on retrenchments and compliance monitoring.

Orders

  • The merger is approved subject to the conditions set out in Annexure A.
  • The merging parties shall not retrench any employees for a period of two years from the approval date, except as specified in the conditions.