CFAO Motors Proprietary Limited v Buddingtrade RF (87) Proprietary Limited (LM138Oct22) [2022] ZACT 93 (21 December 2022)

CFAO Motors Proprietary Limited v Buddingtrade RF (87) Proprietary Limited (LM138Oct22) [2022] ZACT 93 (21 December 2022)

The Tribunal found that the proposed merger between CFAO Motors and Buddingtrade, in respect of the Continental Cars dealership, does not raise competition concerns. The merged entity will continue to face competition from 38 other dealerships in Gqeberha, and the market share accretion is not significant. Intra-brand and inter-brand competition will not be dampened, and the structure of dealership ownership in the area remains unchanged post-merger. No evidence was presented to suggest the relevant market should be broader than defined. Public interest factors, including employment, procurement from HDP and SMME suppliers, and spread of ownership, were considered. The Tribunal accepted...

Citation
[2022] ZACT 93
Parties
Applicant: CFAO Motors Proprietary Limited; Respondent: Buddingtrade RF (87) Proprietary Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
21 December 2022
Case Number
LM138Oct22
Procedural Posture
Merger Approval / Final Determination
Outcome
The merger is approved unconditionally.
Judges
Imraan Valodia, Andiswa Ndoni, Andreas Wessels
Legal Topics
Large Merger, Horizontal Overlap, Public Interest, Market Definition, Employment Effects
Competition Law Commercial and Corporate Large Merger Horizontal Overlap Public Interest Market Definition Employment Effects

Case Brief

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Parties

CFAO Motors Proprietary Limited

Applicant

Buddingtrade RF (87) Proprietary Limited

Respondent

Procedural Posture

Merger Approval / Final Determination

Legal Issues

  1. 1 Whether the proposed merger is likely to substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the transaction raises public interest concerns, including effects on employment, SMMEs, HDP businesses, and spread of ownership.

Ratio Decidendi

The Tribunal found that the proposed merger between CFAO Motors and Buddingtrade, in respect of the Continental Cars dealership, does not raise competition concerns. The merged entity will continue to face competition from 38 other dealerships in Gqeberha, and the market share accretion is not significant. Intra-brand and inter-brand competition will not be dampened, and the structure of dealership ownership in the area remains unchanged post-merger. No evidence was presented to suggest the relevant market should be broader than defined. Public interest factors, including employment, procurement from HDP and SMME suppliers, and spread of ownership, were considered. The Tribunal accepted...

Court Disposition

The merger is approved unconditionally.

Orders

  • The large merger between CFAO Motors Proprietary Limited and Buddingtrade RF (87) Proprietary Limited in respect of the Continental Cars dealership is approved unconditionally.