Bidvest Group Limited and Paragon Business Communications Limited (56/LM/Oct01) [2002] ZACT 1 (16 January 2002)

Bidvest Group Limited and Paragon Business Communications Limited (56/LM/Oct01) [2002] ZACT 1 (16 January 2002)

The Tribunal found that the relevant product markets are 'business forms – continuous' (including 'to sheet' and 'snap sheet') and 'direct mail printing' (including web finishing and laser printing). The evidence did not support the Commission's contention that a bundled product market exists. Although the merger would eliminate a significant competitor and result in high market shares, the Tribunal was persuaded that small firms remain competitive through sub-contracting, excess capacity exists to enable rapid supply response, and large customers exercise substantial countervailing power. Technological innovation and market maturity further constrain the ability of the merged entity to...

Citation
[2002] ZACT 1
Parties
Applicant: Bidvest Group Limited; Respondent: Paragon Business Communications Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
16 January 2002
Case Number
56/LM/Oct01
Procedural Posture
Large Merger Review / Final Decision
Outcome
Merger approved unconditionally.
Judges
D. Lewis, N. Manoim, M. Holden
Legal Topics
Merger Control, Market Definition, Barriers to Entry, Countervailing Power, Public Interest, Market Concentration
Competition Law Commercial and Corporate Merger Control Market Definition Barriers to Entry Countervailing Power Public Interest Market Concentration

Case Brief

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Parties

Bidvest Group Limited

Applicant

Paragon Business Communications Limited

Respondent

Procedural Posture

Large Merger Review / Final Decision

Legal Issues

  1. 1 Whether the proposed merger between Bidvest Group Limited and Paragon Business Communications Limited will substantially prevent or lessen competition in the relevant markets.
  2. 2 How the relevant product and geographic markets should be defined for the purposes of competition analysis.
  3. 3 Whether barriers to entry, market concentration, and countervailing power mitigate potential anti-competitive effects of the merger.

Ratio Decidendi

The Tribunal found that the relevant product markets are 'business forms – continuous' (including 'to sheet' and 'snap sheet') and 'direct mail printing' (including web finishing and laser printing). The evidence did not support the Commission's contention that a bundled product market exists. Although the merger would eliminate a significant competitor and result in high market shares, the Tribunal was persuaded that small firms remain competitive through sub-contracting, excess capacity exists to enable rapid supply response, and large customers exercise substantial countervailing power. Technological innovation and market maturity further constrain the ability of the merged entity to...

Court Disposition

Merger approved unconditionally.

Orders

  • The proposed merger between Bidvest Group Limited and Paragon Business Communications Limited is approved without conditions.