Barloworld South Africa Proprietary Limited v Salvage Management and Disposals Proprietary Limited (LM239Feb16) [2016] ZACT 32 (20 April 2016)

Barloworld South Africa Proprietary Limited v Salvage Management and Disposals Proprietary Limited (LM239Feb16) [2016] ZACT 32 (20 April 2016)

The Tribunal found that the proposed transaction does not present a significant horizontal overlap in the management and sale of salvage vehicles, as Barloworld is not active in these activities. While there is a minor horizontal overlap in the sale of pre-owned commercial vehicles, the market share involved is negligible and does not raise competition concerns. Vertical relationships between the parties were assessed, and the Commission found no risk of input or customer foreclosure, as SMD's share of purchases from Barloworld SA is minimal and viable alternatives exist in the market. The transaction does not adversely affect employment or raise other public interest concerns....

Citation
[2016] ZACT 32
Parties
Applicant: Barloworld South Africa Proprietary Limited; Respondent: Salvage Management & Disposals Proprietary Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
20 April 2016
Case Number
LM239Feb16
Procedural Posture
Merger Approval / Final Determination
Outcome
Merger approved unconditionally.
Judges
Yasmin Carrim, Anton Roskam, Andiswa Ndoni
Legal Topics
Merger Control, Horizontal Overlap, Vertical Relationships, Input Foreclosure, Customer Foreclosure, Public Interest
Competition Law Merger Control Horizontal Overlap Vertical Relationships Input Foreclosure Customer Foreclosure Public Interest

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Parties

Barloworld South Africa Proprietary Limited

Applicant

Salvage Management & Disposals Proprietary Limited

Respondent

Procedural Posture

Merger Approval / Final Determination

Legal Issues

  1. 1 Whether the proposed acquisition of SMD by Barloworld SA is likely to substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the transaction raises any public interest concerns, including adverse impact on employment.
  3. 3 Whether any horizontal or vertical overlaps between the parties create foreclosure risks.

Ratio Decidendi

The Tribunal found that the proposed transaction does not present a significant horizontal overlap in the management and sale of salvage vehicles, as Barloworld is not active in these activities. While there is a minor horizontal overlap in the sale of pre-owned commercial vehicles, the market share involved is negligible and does not raise competition concerns. Vertical relationships between the parties were assessed, and the Commission found no risk of input or customer foreclosure, as SMD's share of purchases from Barloworld SA is minimal and viable alternatives exist in the market. The transaction does not adversely affect employment or raise other public interest concerns....

Court Disposition

Merger approved unconditionally.

Orders

  • The proposed transaction between Barloworld South Africa Proprietary Limited and Salvage Management & Disposals Proprietary Limited is approved without conditions.