Air Products South Africa (Pty) Ltd v Weldamax (Pty) Ltd (LM127Nov21) [2022] ZACT 54 (24 March 2022)
The Tribunal found that the proposed merger would not substantially prevent or lessen competition in the relevant markets for industrial and speciality gases and welding equipment. However, the Tribunal identified public interest concerns relating to the participation of small businesses and historically...
Source-derived case information.
- Citation
- [2022] ZACT 54
- Parties
- Applicant: Air Products South Africa (Pty) Ltd; Respondent: Weldamax (Pty) Ltd
- Court
- Competition Tribunal
- Jurisdiction
- South Africa
- Case Number
- LM127Nov21
- Procedural Posture
- Merger Control / Merger Approval
- Outcome
- Merger approved subject to public interest conditions.
- Legal Topics
- Merger Control, Public Interest Conditions, Broad Based Black Economic Empowerment, Market Entry, Small Business Support
Source-derived case record
Summary, issues, holding and outcome
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Parties
Air Products South Africa (Pty) Ltd
Applicant
Weldamax (Pty) Ltd
Respondent
Procedural Posture
Merger Control / Merger Approval
Legal Issues
- 1 Whether the proposed merger between Air Products South Africa (Pty) Ltd and Weldamax (Pty) Ltd should be approved under the Competition Act.
- 2 Whether the merger raises public interest concerns requiring conditions, specifically regarding market participation by small businesses and historically disadvantaged persons.
- 3 Whether the transaction affects broad-based black economic empowerment ownership in the merged entity.
Ratio Decidendi
The Tribunal found that the proposed merger would not substantially prevent or lessen competition in the relevant markets for industrial and speciality gases and welding equipment. However, the Tribunal identified public interest concerns relating to the participation of small businesses and historically disadvantaged persons in the market. To address these concerns, the Tribunal imposed conditions requiring the establishment of a fund to support market entry and expansion by small businesses and HDPs, as well as measures to increase B-BBEE ownership in the merged entity. The merger was therefore approved subject to these conditions.
Court Disposition
Merger approved subject to public interest conditions.
Orders
- The proposed merger between Air Products South Africa (Pty) Ltd and Weldamax (Pty) Ltd is approved subject to conditions.
- A fund must be established to enable small businesses and historically disadvantaged persons to enter, participate in, and expand within the market.
Full Case Text
Judgment text and source record
19 paragraphs
Merger Alert
Date of release: 24 March 2022
OUTCOME OF MERGERS DECIDED BY THE COMPETITION TRIBUNAL
Type of matter
Parties involved
Tribunal decision
Large merger Air Products South Africa (Pty) Ltd And Weldamax (Pty) Ltd: Approved with conditions
Air Products South Africa (Pty) Ltd And Weldamax (Pty) Ltd
The Competition Tribunal has conditionally approved the large merger wherein Air Products South Africa (Pty) Ltd (“Air Products”) intends to acquire Weldamax (Pty) Ltd (“Weldamax”). On implementation of the proposed merger, Air Products will have sole control over Weldamax.
The Tribunal has approved the proposed transaction with conditions relating to the establishment of a fund to enable small businesses and historically disadvantaged persons (“HDPs”) to enter into, participate in and expand within the market, as well as increasing the HDP or broad-based black economic empowerment (“B-BBEE”) ownership interest in the merged entity.
Air Products primarily manufactures, supplies, and distributes industrial and speciality gases which are used by customers across various industries in South Africa. Air Products also supplies ancillary speciality gas regulating, controlling, and handling equipment.
Weldamax distributes a range of manual metal Arc welding, stick manual Arc welding and other welding equipment, consumables and accessories. Weldamax trades, in part, under the name Unique Welding which is an independent distributor of industrial gas, welding consumables and welding equipment. Unique Welding sells these products through both retail and wholesale channels. Weldamax also distributes a range of Air Products’ packaged industrial and speciality welding gases.
A full press release will be issued in due course.
Issued by:
Gillian de Gouveia, Communications Officer
On behalf of the Competition Tribunal of South Africa
Cell: +27 (0) 82 410 1195
E-Mail: GillianD@comptrib.co.za
Twitter: @comptrib