BP Amoco Plc and Burmah Castrol Plc (72/LM/Jun00) [2000] ZACT 36 (5 September 2000)

BP Amoco Plc and Burmah Castrol Plc (72/LM/Jun00) [2000] ZACT 36 (5 September 2000)

The Tribunal found that, although the post-merger market shares of the merged entity would be high, sufficient competition exists in the South African lubricants market due to the presence of major competitors and approximately 80 smaller producers. Barriers to entry are low, as new entrants can utilize existing blending facilities without disadvantage. Significant countervailing power exists among buyers in both the industrial and automotive lubricant markets. The merger does not raise any public interest concerns under section 16(3) of the Competition Act. Accordingly, the merger does not substantially prevent or lessen competition in the relevant markets.

Citation
[2000] ZACT 36
Parties
Applicant: BP Amoco Plc; Respondent: Burmah Castrol Plc
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
5 September 2000
Case Number
72/LM/Jun00
Procedural Posture
Large Merger / Merger Approval
Outcome
Merger approved without conditions.
Judges
D. Lewis, N.M. Manoim, P.E Maponya
Legal Topics
Merger Control, Market Definition, Barriers to Entry, Countervailing Power
Competition Law Commercial and Corporate Merger Control Market Definition Barriers to Entry Countervailing Power

Case Brief

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Parties

BP Amoco Plc

Applicant

Burmah Castrol Plc

Respondent

Procedural Posture

Large Merger / Merger Approval

Legal Issues

  1. 1 Does the proposed merger between BP Amoco Plc and Burmah Castrol Plc substantially prevent or lessen competition in the relevant South African markets?
  2. 2 Are there significant barriers to entry in the lubricants market post-merger?
  3. 3 Does the merger raise any public interest concerns under section 16(3) of the Competition Act?

Ratio Decidendi

The Tribunal found that, although the post-merger market shares of the merged entity would be high, sufficient competition exists in the South African lubricants market due to the presence of major competitors and approximately 80 smaller producers. Barriers to entry are low, as new entrants can utilize existing blending facilities without disadvantage. Significant countervailing power exists among buyers in both the industrial and automotive lubricant markets. The merger does not raise any public interest concerns under section 16(3) of the Competition Act. Accordingly, the merger does not substantially prevent or lessen competition in the relevant markets.

Court Disposition

Merger approved without conditions.

Orders

  • The merger between BP Amoco Plc and Burmah Castrol Plc is approved without conditions.
  • A Merger Clearance Certificate is issued.