Barmarc (Pty) Ltd and ATC (Pty) Ltd (Telecoms) & Another (70/LM/Aug06) [2007] ZACT 16; [2007] 1 CPLR 144 (CT) (16 February 2007)

Barmarc (Pty) Ltd and ATC (Pty) Ltd (Telecoms) & Another (70/LM/Aug06) [2007] ZACT 16; [2007] 1 CPLR 144 (CT) (16 February 2007)

The Tribunal found that the merger would not result in a substantial lessening or prevention of competition in the relevant cable markets. Although the merged entity would have a high combined market share in the indoor copper cable market, the market share accretion was minimal and the market operates largely on a tender basis, limiting the ability to accumulate market power. The Tribunal accepted the parties' assurances regarding the lack of increased cooperation between the Reunert and Altron groups. The Tribunal determined that the relationship between Aberdare and Kewberg required a remedy to ensure independence, but the parties had already taken steps to dispose of Aberdare's...

Citation
[2007] ZACT 16
Parties
Applicant: Barmarc (Pty) Ltd; Applicant: ATC (Pty) Ltd (Telecoms); Respondent: Aberdare Cables (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
16 February 2007
Case Number
70/LM/Aug06
Procedural Posture
Merger Application / Merger Clearance With Conditions
Outcome
Merger approved subject to conditions.
Judges
DH Lewis, N Manoim, Y Carrim
Legal Topics
Merger Clearance, Market Definition, Horizontal Overlap, Remedies, Public Interest
Competition Law Commercial and Corporate Merger Clearance Market Definition Horizontal Overlap Remedies Public Interest

Case Brief

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Parties

Barmarc (Pty) Ltd

Applicant

ATC (Pty) Ltd (Telecoms)

Applicant

Aberdare Cables (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Merger Clearance With Conditions

Legal Issues

  1. 1 Whether the proposed joint venture between ATC and Aberdare would result in a substantial lessening or prevention of competition in the relevant cable markets.
  2. 2 Whether the relationship between Aberdare and Kewberg creates competition concerns requiring remedies.
  3. 3 Whether public interest considerations are implicated by the merger.

Ratio Decidendi

The Tribunal found that the merger would not result in a substantial lessening or prevention of competition in the relevant cable markets. Although the merged entity would have a high combined market share in the indoor copper cable market, the market share accretion was minimal and the market operates largely on a tender basis, limiting the ability to accumulate market power. The Tribunal accepted the parties' assurances regarding the lack of increased cooperation between the Reunert and Altron groups. The Tribunal determined that the relationship between Aberdare and Kewberg required a remedy to ensure independence, but the parties had already taken steps to dispose of Aberdare's...

Court Disposition

Merger approved subject to conditions.

Orders

  • The merger is approved in terms of section 16(2)(b) of the Competition Act subject to the condition that Aberdare Cables (Pty) Ltd's 33.3% interest in Kewberg Cables and Braids (Pty) Ltd is sold to S R Van Rensburg by 31 January 2007.
  • If the sale does not take place by the effective date, Aberdare must sell its 33.3% interest in Kewberg within one month after the effective date to a buyer approved by the Competition Commission, who is independent of both ATC (Pty) Ltd and Aberdare.