Crest Chemicals (Pty) Ltd v CH Chemicals (Pty) Ltd (131/LM/Dec08) [2009] ZACT 30 (12 May 2009)

Crest Chemicals (Pty) Ltd v CH Chemicals (Pty) Ltd (131/LM/Dec08) [2009] ZACT 30 (12 May 2009)

The Tribunal found that the relevant market for analysis is the chemical distribution market, not the chemical products market, as neither party is involved in manufacturing. The merging parties are general third-party distributors and compete with several other distributors. The Tribunal determined that the merged entity would not have a dominant position, and viable alternative distributors exist to constrain its market power. Concerns raised about exclusive agreements and price increases were investigated and found to be attributable to external factors such as exchange rates and input costs, not the merger. Vertical concerns were dismissed due to the lack of market power and the...

Citation
[2009] ZACT 30
Parties
Applicant: Crest Chemicals (Pty) Ltd; Respondent: CH Chemicals (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
12 May 2009
Case Number
131/LM/Dec08
Procedural Posture
Merger Application / Tribunal Approval and Reasons
Outcome
Merger approved without conditions.
Judges
D Lewis, N Manoim, Y Carrim
Legal Topics
Horizontal Merger Analysis, Vertical Merger Analysis, Market Definition, Foreclosure, Public Interest
Competition Law Horizontal Merger Analysis Vertical Merger Analysis Market Definition Foreclosure Public Interest

Case Brief

Summary, issues, holding and outcome

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Parties

Crest Chemicals (Pty) Ltd

Applicant

CH Chemicals (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Tribunal Approval and Reasons

Legal Issues

  1. 1 Whether the proposed merger between Crest Chemicals and CH Chemicals is likely to substantially lessen or prevent competition in the relevant market.
  2. 2 Whether there are any public interest concerns arising from the merger.
  3. 3 Whether the merger raises horizontal or vertical competition concerns.

Ratio Decidendi

The Tribunal found that the relevant market for analysis is the chemical distribution market, not the chemical products market, as neither party is involved in manufacturing. The merging parties are general third-party distributors and compete with several other distributors. The Tribunal determined that the merged entity would not have a dominant position, and viable alternative distributors exist to constrain its market power. Concerns raised about exclusive agreements and price increases were investigated and found to be attributable to external factors such as exchange rates and input costs, not the merger. Vertical concerns were dismissed due to the lack of market power and the...

Court Disposition

Merger approved without conditions.

Orders

  • The merger between Crest Chemicals (Pty) Ltd and CH Chemicals (Pty) Ltd is approved.
  • No conditions are imposed on the approval of the merger.