Chemical Services Limited v Resinkem Proprietary Limited (LM231Mar15 (021030)) [2015] ZACT 78 (2 July 2015)

Chemical Services Limited v Resinkem Proprietary Limited (LM231Mar15 (021030)) [2015] ZACT 78 (2 July 2015)

The Tribunal found that the proposed transaction, which shifted Resinkem from joint to sole control by Chemical Services Limited, would not substantially prevent or lessen competition in any relevant market. The vertical overlap created by the merger was not significant, as alternative suppliers existed and the market structure remained unchanged. The Commission's analysis showed no risk of input foreclosure or incentive for Resinkem to raise prices or decrease output. The Tribunal also accepted the merging parties' submission that the retrenchments were not merger-specific and that the transaction would prevent further job losses by avoiding liquidation. No other public interest concerns...

Citation
[2015] ZACT 78
Parties
Applicant: Chemical Services Limited; Respondent: Resinkem Proprietary Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
2 July 2015
Case Number
LM231Mar15 (021030)
Procedural Posture
Merger Approval / Reasons for Decision
Outcome
Merger approved unconditionally.
Judges
Y Carrim, F Tregenna, M Mokuena
Legal Topics
Merger Control, Input Foreclosure, Public Interest, Vertical Overlap
Competition Law Merger Control Input Foreclosure Public Interest Vertical Overlap

Case Brief

Summary, issues, holding and outcome

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Parties

Chemical Services Limited

Applicant

Resinkem Proprietary Limited

Respondent

Procedural Posture

Merger Approval / Reasons for Decision

Legal Issues

  1. 1 Whether the proposed merger would substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the transaction would result in input foreclosure or a change in incentives for Resinkem to increase prices or decrease output.
  3. 3 Whether the transaction raises any public interest concerns, particularly regarding employment.

Ratio Decidendi

The Tribunal found that the proposed transaction, which shifted Resinkem from joint to sole control by Chemical Services Limited, would not substantially prevent or lessen competition in any relevant market. The vertical overlap created by the merger was not significant, as alternative suppliers existed and the market structure remained unchanged. The Commission's analysis showed no risk of input foreclosure or incentive for Resinkem to raise prices or decrease output. The Tribunal also accepted the merging parties' submission that the retrenchments were not merger-specific and that the transaction would prevent further job losses by avoiding liquidation. No other public interest concerns...

Court Disposition

Merger approved unconditionally.

Orders

  • The proposed transaction is approved unconditionally.