Alstom Societe Anonyme v Bombardier Transportation (Investment) UK Ltd (LM027May20) [2021] ZACT 5 (12 March 2021)

Alstom Societe Anonyme v Bombardier Transportation (Investment) UK Ltd (LM027May20) [2021] ZACT 5 (12 March 2021)

The Tribunal found that the proposed merger between Alstom and Bombardier would not substantially prevent or lessen competition in the South African rolling stock and signalling systems markets. Post-merger market shares would remain below 20%, with several large international competitors continuing to exert competitive constraints. The tender-based nature of the markets and high barriers to entry further mitigated anti-competitive risks. Public interest concerns, particularly regarding the continued availability of certain parts and support in the signalling systems market, were addressed through conditions requiring the merged entity to supply AGATE, Ebilock, and iVPI products and...

Citation
[2021] ZACT 5
Parties
Applicant: Alstom Societe Anonyme; Respondent: Bombardier Transportation (Investment) UK Ltd; Respondent: Competition Commission
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
12 March 2021
Case Number
LM027May20
Procedural Posture
Large Merger / Conditional Approval After Hearing
Outcome
Merger conditionally approved subject to tendered conditions.
Judges
Mondo Mazwai, Yasmin Carrim, Fiona Tregenna
Legal Topics
Large Merger Review, Market Concentration, Public Interest Conditions, Refurbishment Market, Supply Chain Concerns, B Bbee Ownership
Competition Law Commercial and Corporate Large Merger Review Market Concentration Public Interest Conditions Refurbishment Market Supply Chain Concerns B Bbee Ownership

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Parties

Alstom Societe Anonyme

Applicant

Bombardier Transportation (Investment) UK Ltd

Respondent

Competition Commission

Respondent

Procedural Posture

Large Merger / Conditional Approval After Hearing

Legal Issues

  1. 1 Whether the proposed merger between Alstom and Bombardier would substantially prevent or lessen competition in the South African rolling stock and signalling systems markets.
  2. 2 Whether the merger would negatively impact public interest, specifically employment, B-BBEE ownership, and the availability of certain parts and support in the signalling systems market.
  3. 3 Whether conditions should be imposed to address concerns raised by third parties and the Department of Transport.

Ratio Decidendi

The Tribunal found that the proposed merger between Alstom and Bombardier would not substantially prevent or lessen competition in the South African rolling stock and signalling systems markets. Post-merger market shares would remain below 20%, with several large international competitors continuing to exert competitive constraints. The tender-based nature of the markets and high barriers to entry further mitigated anti-competitive risks. Public interest concerns, particularly regarding the continued availability of certain parts and support in the signalling systems market, were addressed through conditions requiring the merged entity to supply AGATE, Ebilock, and iVPI products and...

Court Disposition

Merger conditionally approved subject to tendered conditions.

Orders

  • The merger between Alstom Societe Anonyme and Bombardier Transportation (Investment) UK Ltd is approved subject to conditions attached as Annexure A.
  • The merged entity must make AGATE, Ebilock, and iVPI products and support available in South Africa for twelve years from the implementation date.