Chemical Services Limited and Leochem (Pty) Ltd (109/LM/Nov05) [2006] ZACT 14 (22 February 2006)

Chemical Services Limited and Leochem (Pty) Ltd (109/LM/Nov05) [2006] ZACT 14 (22 February 2006)

The Tribunal found that the merger between Chemical Services Limited and Leochem (Pty) Ltd would not substantially prevent or lessen competition in either the horizontal or vertical product markets. In the distilled tall oil market, although the merged entity's market share would increase, the presence of low import barriers and alternative suppliers ensures that competition remains effective. In the gum rosin market, imports are increasing and entry barriers are low, with several local and international suppliers available. Vertical effects were also found to be non-problematic, as customer and input foreclosure are unlikely due to the presence of alternative suppliers and insignificant...

Citation
[2006] ZACT 14
Parties
Applicant: Chemical Services Limited; Respondent: Leochem (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
22 February 2006
Case Number
109/LM/Nov05
Procedural Posture
Large Merger / Merger Approval
Outcome
Merger approved unconditionally.
Judges
Y Carrim, U Bhoola, M Mokuena
Legal Topics
Horizontal Merger Analysis, Vertical Merger Analysis, Market Share Assessment, Barriers to Entry, Public Interest Considerations
Competition Law Commercial and Corporate Horizontal Merger Analysis Vertical Merger Analysis Market Share Assessment Barriers to Entry Public Interest Considerations

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 1 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

Chemical Services Limited

Applicant

Leochem (Pty) Ltd

Respondent

Procedural Posture

Large Merger / Merger Approval

Legal Issues

  1. 1 Does the proposed merger substantially prevent or lessen competition in the relevant horizontal and vertical product markets?
  2. 2 Are there significant barriers to entry or potential for foreclosure in the affected markets?
  3. 3 Are there any public interest concerns arising from the merger, including employment effects?

Ratio Decidendi

The Tribunal found that the merger between Chemical Services Limited and Leochem (Pty) Ltd would not substantially prevent or lessen competition in either the horizontal or vertical product markets. In the distilled tall oil market, although the merged entity's market share would increase, the presence of low import barriers and alternative suppliers ensures that competition remains effective. In the gum rosin market, imports are increasing and entry barriers are low, with several local and international suppliers available. Vertical effects were also found to be non-problematic, as customer and input foreclosure are unlikely due to the presence of alternative suppliers and insignificant...

Court Disposition

Merger approved unconditionally.

Orders

  • The merger between Chemical Services Limited and Leochem (Pty) Ltd is approved without conditions.