Cape Harvest Food Group (Pty) Ltd v BM Food Group (Pty) Ltd (LM034Jun21) [2021] ZACT 57 (26 August 2021)

Cape Harvest Food Group (Pty) Ltd v BM Food Group (Pty) Ltd (LM034Jun21) [2021] ZACT 57 (26 August 2021)

The Tribunal found that the proposed merger between Cape Harvest Food Group and BM Food Group would not substantially prevent or lessen competition in any relevant market. The post-merger market shares in the affected markets were low, and the merged entity would continue to face competition from several other firms. No third parties raised concerns about the transaction. The Tribunal also noted that there would be no retrenchments as a result of the merger and that the transaction would introduce a BEE shareholding in BM Food, thereby positively affecting Broad-Based Black Economic Empowerment. Accordingly, the Tribunal approved the merger unconditionally.

Citation
[2021] ZACT 57
Parties
Applicant: Cape Harvest Food Group (Pty) Ltd; Respondent: BM Food Group (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
26 August 2021
Case Number
LM034Jun21
Procedural Posture
Merger Approval / Final Determination
Outcome
Merger unconditionally approved.
Judges
E Daniels, Y Carrim, H Cheadle
Legal Topics
Large Merger, Horizontal Overlap, Market Share Analysis, Broad Based Black Economic Empowerment
Competition Law Large Merger Horizontal Overlap Market Share Analysis Broad Based Black Economic Empowerment

Case Brief

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Parties

Cape Harvest Food Group (Pty) Ltd

Applicant

BM Food Group (Pty) Ltd

Respondent

Procedural Posture

Merger Approval / Final Determination

Legal Issues

  1. 1 Does the proposed merger substantially prevent or lessen competition in any relevant market?
  2. 2 Will the transaction result in any retrenchments or negative employment effects?
  3. 3 Does the merger promote Broad-Based Black Economic Empowerment or worker ownership?

Ratio Decidendi

The Tribunal found that the proposed merger between Cape Harvest Food Group and BM Food Group would not substantially prevent or lessen competition in any relevant market. The post-merger market shares in the affected markets were low, and the merged entity would continue to face competition from several other firms. No third parties raised concerns about the transaction. The Tribunal also noted that there would be no retrenchments as a result of the merger and that the transaction would introduce a BEE shareholding in BM Food, thereby positively affecting Broad-Based Black Economic Empowerment. Accordingly, the Tribunal approved the merger unconditionally.

Court Disposition

Merger unconditionally approved.

Orders

  • The merger between Cape Harvest Food Group (Pty) Ltd and BM Food Group (Pty) Ltd is approved in terms of section 16(2)(a) of the Competition Act, 1998.
  • A Merger Clearance Certificate is to be issued in terms of Competition Tribunal Rule 35(5)(a).