CIH Projects No. 41 Proprietary Limited v Conlog Proprietary Limited and Others (LM149Nov22) [2023] ZACT 33; [2024] 1 CPLR 5 (CT) (24 January 2023)

CIH Projects No. 41 Proprietary Limited v Conlog Proprietary Limited and Others (LM149Nov22) [2023] ZACT 33; [2024] 1 CPLR 5 (CT) (24 January 2023)

The Tribunal found that the proposed merger does not give rise to any horizontal overlaps, as the Acquiring Group does not compete with the Target Firms in the manufacture and supply of electricity meters and related services. The only supply relationship is Jasco's provision of inputs to Conlog, which is limited to manufacturing using Conlog's own equipment and moulds, and does not constitute a contestable market. There is no risk of input foreclosure, and other suppliers in the market raised no concerns. The merger will not result in any retrenchments, and the unions representing employees did not object. The transaction increases HDP ownership in the Target Firms. Accordingly, the...

Citation
[2023] ZACT 33
Parties
Applicant: CIH Projects No. 41 Proprietary Limited; Respondent: Conlog Proprietary Limited; Respondent: Parmtro Investments No. 11 Proprietary Limited; Respondent: Conlog Metering Solutions Nigeria Limited; Respondent: Cig Metering Assets Nigeria Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
24 January 2023
Case Number
LM149Nov22
Procedural Posture
Large Merger / Merger Approval
Outcome
Merger unconditionally approved.
Judges
Liberty Mncube, Mondo Mazwai, Imraan Valodia
Legal Topics
Merger Control, Input Foreclosure, Public Interest, Hdp Ownership, Employment Effects
Competition Law Merger Control Input Foreclosure Public Interest Hdp Ownership Employment Effects

Case Brief

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Parties

CIH Projects No. 41 Proprietary Limited

Applicant

Conlog Proprietary Limited

Respondent

Parmtro Investments No. 11 Proprietary Limited

Respondent

Conlog Metering Solutions Nigeria Limited

Respondent

Cig Metering Assets Nigeria Limited

Respondent

Procedural Posture

Large Merger / Merger Approval

Legal Issues

  1. 1 Does the proposed merger create horizontal overlaps in the manufacture and supply of electricity meters and ancillary services.
  2. 2 Is there a risk of input foreclosure due to the Acquiring Group's supply of components to the Target Firms.
  3. 3 Will the merger result in any substantial prevention or lessening of competition in any relevant market.

Ratio Decidendi

The Tribunal found that the proposed merger does not give rise to any horizontal overlaps, as the Acquiring Group does not compete with the Target Firms in the manufacture and supply of electricity meters and related services. The only supply relationship is Jasco's provision of inputs to Conlog, which is limited to manufacturing using Conlog's own equipment and moulds, and does not constitute a contestable market. There is no risk of input foreclosure, and other suppliers in the market raised no concerns. The merger will not result in any retrenchments, and the unions representing employees did not object. The transaction increases HDP ownership in the Target Firms. Accordingly, the...

Court Disposition

Merger unconditionally approved.

Orders

  • The large merger between CIH Projects No. 41 Proprietary Limited and the Target Firms is unconditionally approved.
  • No conditions are imposed on the approval of the merger.