Cray Valley Resins SA (Pty) Ltd and Coates Bros SA (Pty) Ltd (02/LM/Jan02) [2002] ZACT 16 (25 March 2002)

Cray Valley Resins SA (Pty) Ltd and Coates Bros SA (Pty) Ltd (02/LM/Jan02) [2002] ZACT 16 (25 March 2002)

The Tribunal found that there was no product overlap between the merging parties, as the resins produced and sold by each were distinct and non-substitutable. The vertical relationship between Cray Valley and Prominent Paints, both within the TotalFinaElf Group, was managed at arm's length and did not confer market dominance or the ability to foreclose competitors. Prominent Paints held only a modest market share and was not a major consumer of Cray Valley's supply. The merger did not raise barriers to entry in either the paint or resin markets. Furthermore, the transaction did not give rise to any public interest concerns, including employment loss. Accordingly, the Tribunal concluded...

Citation
[2002] ZACT 16
Parties
Applicant: Cray Valley Resins SA (Pty) Ltd; Respondent: Coates Bros SA (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
25 March 2002
Case Number
02/LM/Jan02
Procedural Posture
Large Merger / Merger Approval
Outcome
Merger approved without conditions.
Judges
D.H. Lewis, N. Manoim, S. Zilwa
Legal Topics
Merger Clearance, Horizontal Overlap, Vertical Integration, Public Interest, Market Definition
Competition Law Commercial and Corporate Merger Clearance Horizontal Overlap Vertical Integration Public Interest Market Definition

Case Brief

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Parties

Cray Valley Resins SA (Pty) Ltd

Applicant

Coates Bros SA (Pty) Ltd

Respondent

Procedural Posture

Large Merger / Merger Approval

Legal Issues

  1. 1 Whether the proposed merger would substantially lessen competition in any relevant market.
  2. 2 Whether the merger would result in foreclosure or raise barriers to entry in the paint or resin markets.
  3. 3 Whether the merger raises any public interest concerns, including employment.

Ratio Decidendi

The Tribunal found that there was no product overlap between the merging parties, as the resins produced and sold by each were distinct and non-substitutable. The vertical relationship between Cray Valley and Prominent Paints, both within the TotalFinaElf Group, was managed at arm's length and did not confer market dominance or the ability to foreclose competitors. Prominent Paints held only a modest market share and was not a major consumer of Cray Valley's supply. The merger did not raise barriers to entry in either the paint or resin markets. Furthermore, the transaction did not give rise to any public interest concerns, including employment loss. Accordingly, the Tribunal concluded...

Court Disposition

Merger approved without conditions.

Orders

  • The merger between Cray Valley Resins SA (Pty) Ltd and Coates Bros SA (Pty) Ltd is approved without conditions.
  • A Merger Clearance Certificate is issued.