Aker Horizons AS v Mainstream Renewables Power Ltd (LM192Feb21) [2021] ZACT 20 (26 February 2021)
- Citation
- [2021] ZACT 20
- Status
- Order
- Jurisdiction
- South Africa
- Court
- Competition Tribunal
- Panel
- Enver Daniels, Mondo Mazwai, Andreas Wessel
- Case number
- LM192Feb21
More details
- Court
- Competition Tribunal
- Panel
- Enver Daniels, Mondo Mazwai, Andreas Wessel
- Case number
- LM192Feb21
On this page
Professional case brief
Research organized from the available case record
01
Holding and result
The Tribunal found that the proposed merger between Aker Horizons AS and Mainstream Renewables Power Ltd would not result in any substantial prevention or lessening of competition in any relevant market in South Africa. The acquiring firm has no activities or employees in South Africa, and the target firm's employees were notified with no concerns raised. There are no horizontal or vertical overlaps between the parties in South Africa, and no third party raised any objections. The merger does not negatively affect the public interest, including employment. Accordingly, the Tribunal approved the merger unconditionally.
Court disposition
Merger unconditionally approved.
Orders
- The large merger between Aker Horizons AS and Mainstream Renewables Power Ltd is approved without conditions.
02
Material facts
Parties
Aker Horizons AS
Applicant Counsel: M Angumuthoo of BowmansMainstream Renewables Power Ltd
Respondent Counsel: N Mackenzie of Fasken03
Procedural history
Posture
Merger Application / Decision on Approval
04
Questions and positions
Legal issues
- 01
Whether the proposed merger will substantially prevent or lessen competition in any relevant market in South Africa.
- 02
Whether the merger will have any negative effect on the public interest, including employment.
Party arguments
- Applicant
- The merging parties submitted that the proposed transaction occurs at an international level, with Aker Horizons AS acquiring shares in Mainstream Renewables Power Ltd. They argued that Aker has no activities or employees in South Africa, and that the transaction will not result in any retrenchments or adverse effects on competition or public interest.
- Respondent
- The Competition Commission submitted that there are no horizontal or vertical overlaps between the activities of the merging parties in South Africa. The Commission confirmed that the acquiring firm has no employees in South Africa, and that the target firm's employees were notified with no concerns raised. No third party objected to the merger.
05
Court’s reasoning
Legal principles
- 01
Section 12A of the Competition Act, 89 of 1998
A merger may only be prohibited if it is likely to substantially prevent or lessen competition in any relevant market, or if it negatively affects the public interest.
- 02
Competition Act, 89 of 1998
Notification and consultation with employees is required in merger proceedings, and absence of objections is a relevant factor.
06
Ratio, limits and disposition
Ratio decidendi
The Tribunal found that the proposed merger between Aker Horizons AS and Mainstream Renewables Power Ltd would not result in any substantial prevention or lessening of competition in any relevant market in South Africa. The acquiring firm has no activities or employees in South Africa, and the target firm's employees were notified with no concerns raised. There are no horizontal or vertical overlaps between the parties in South Africa, and no third party raised any objections. The merger does not negatively affect the public interest, including employment. Accordingly, the Tribunal approved the merger unconditionally.
Obiter and limits
- The Tribunal noted that the transaction is international in nature, with the acquiring firm based in Norway and the target firm in Ireland.
- The wind projects operated by the target firm in South Africa have long-term Power Purchase Agreements with Eskom under the Renewable Energy Independent Power Producer Procurement Programme.
Court disposition
Merger unconditionally approved.
- The large merger between Aker Horizons AS and Mainstream Renewables Power Ltd is approved without conditions.
Source and reliance status
Competition Tribunal
This page organises the available record for research. Confirm quotations, current status, and subsequent treatment against the official source before relying on the case.
Judgment reading view
Judgment text
The complete available source text.
Competition Tribunal
Order
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case no: LM192Feb21
Aker Horizons AS (Primary Acquiring Firm)
and
Mainstream Renewables Power Ltd (Primary Target Firm)
Heard on: 26 February 2021
Order Issued on: 26 February 2021
REASONS
FOR DECISION
[1] On 26 February 2021, the Competition Tribunal unconditionally approved a large merger whereby Aker Horizons AS (âAkerâ) will acquire, [â¦] of the issued share capital in Mainstream Renewable Power Ltd (âMRPâ).
[2] Aker is an investment company established by Aker ASA with a mandate to invest and actively enter into the renewable energy and clean technology sector. The Aker groupâs activities in South Africa [â¦] Aker does not have any activities in South Africa.
[3] MRP is a company incorporated in terms of the laws of the Republic of Ireland.[1] MRP is a global renewable energy company that develops, builds, and operates wind and solar power plants (utility-scale renewable assets) in various markets worldwide, including South Africa. Through Lekela Power B.V, MRP has developed and brought to financial close five operational wind projects.[2]
[4] In short, the transaction happens at an international level where Norwegian firm, Aker is acquiring from an Irish firm MRP, its South African interests in renewable energy.
[5] The Competition Commission (âCommissionâ) found that the proposed transaction does not result in any horizontal or vertical overlaps between the activities of the merging parties in South Africa.
[6] Further, the Commission found that the acquiring firm does not have any employees in South Africa. In terms of the target firm, its South African employees, through their employee representative, were notified of the merger and no concerns were raised. The merging parties submitted that the proposed transaction will not result in any retrenchments.
[7] No third party raised any concern.
[8] We concluded that the proposed merger is unlikely to result in a substantial prevention or lessening of competition in any relevant market, and that it does not have any negative effect on the public interest.
12 March 2021
Mr Enver Daniels Date
Ms Mondo Mazwai and Mr Andreas Wessel concurring.
Tribunal Case Manager: Lumkisa Jordan
For the Merging Parties: M Angumuthoo of Bowmans and N Mackenzie of Fasken
For the Commission: B Mabatamela and R Maphwanya
[1] [â¦]
[2] The wind projects have 20-year Power Purchase Agreements (âPPAsâ) with the national power producer, Eskom, pursuant the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). The Lekela Power B.V projects are located in the Northern Cape and Western Cape provinces.
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