Arcelormittal South Africa Ltd v Highveld Structural Mill (LM116Oct19) [2020] ZACT 84 (11 March 2020)

Arcelormittal South Africa Ltd v Highveld Structural Mill (LM116Oct19) [2020] ZACT 84 (11 March 2020)

The Tribunal found that the proposed merger would not result in a substantial lessening or prevention of competition in any relevant market. The Commission's investigation revealed that there would be no structural change to the market for overlapping long and medium steel products, as Highveld Structural Mill could not independently produce steel and imports provided competitive constraints. The assessment of conglomerate effects showed that bundling of heavy sections with other steel products would not be anticompetitive due to the presence of imports. The counterfactual analysis demonstrated that, absent the merger, the structural mill business would be wound down, resulting in job...

Citation
[2020] ZACT 84
Parties
Applicant: ArcelorMittal South Africa Ltd; Respondent: Highveld Structural Mill (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
11 March 2020
Case Number
LM116Oct19
Procedural Posture
Large Merger / Approval
Outcome
Merger approved unconditionally.
Judges
E Daniels, Y Carrim, F Tregenna
Legal Topics
Large Merger Review, Market Definition, Public Interest, Employment Effects, Conglomerate Effects
Competition Law Commercial and Corporate Large Merger Review Market Definition Public Interest Employment Effects Conglomerate Effects

Case Brief

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Parties

ArcelorMittal South Africa Ltd

Applicant

Highveld Structural Mill (Pty) Ltd

Respondent

Procedural Posture

Large Merger / Approval

Legal Issues

  1. 1 Whether the proposed merger between ArcelorMittal South Africa Ltd and the structural steel and rail business of Highveld Structural Mill (Pty) Ltd is likely to substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the transaction raises any public interest concerns, including effects on employment and domestic industry capacity.

Ratio Decidendi

The Tribunal found that the proposed merger would not result in a substantial lessening or prevention of competition in any relevant market. The Commission's investigation revealed that there would be no structural change to the market for overlapping long and medium steel products, as Highveld Structural Mill could not independently produce steel and imports provided competitive constraints. The assessment of conglomerate effects showed that bundling of heavy sections with other steel products would not be anticompetitive due to the presence of imports. The counterfactual analysis demonstrated that, absent the merger, the structural mill business would be wound down, resulting in job...

Court Disposition

Merger approved unconditionally.

Orders

  • The large merger between ArcelorMittal South Africa Ltd and the manufacturing and production of structural steel and rail business of Highveld Structural Mill (Pty) Ltd is approved without conditions.