DB Investments SA and De Beers Consolidated Mines Ltd / De Beers Centenary AG (20/LM/Mar01) [2001] ZACT 20 (18 May 2001)

DB Investments SA and De Beers Consolidated Mines Ltd / De Beers Centenary AG (20/LM/Mar01) [2001] ZACT 20 (18 May 2001)

The Tribunal found no product overlap between the activities of the merging parties, as Anglo's only interest in diamonds is through its investment in De Beers, and De Beers has no interests in other mining or natural resources sectors. Vertical integration concerns regarding tungsten carbide and industrial diamonds were investigated and found to be mitigated by arm's length transactions and the presence of alternative suppliers. Public interest concerns, particularly regarding employment, were addressed by the merging parties' undertaking that no job losses would result from the transaction, and the Tribunal found no evidence that the merger would affect employment conditions in either...

Citation
[2001] ZACT 20
Parties
Applicant: DB Investments SA; Respondent: De Beers Consolidated Mines Ltd; Respondent: De Beers Centenary AG
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
18 May 2001
Case Number
20/LM/Mar01
Procedural Posture
Large Merger / Merger Approval
Outcome
Merger approved without conditions.
Judges
D.H.Lewis, N. Manoim, M Holden
Legal Topics
Large Merger Review, Public Interest Considerations, Vertical Integration, Substantial Lessening of Competition, Scheme of Arrangement
Competition Law Commercial and Corporate Large Merger Review Public Interest Considerations Vertical Integration Substantial Lessening of Competition Scheme of Arrangement

Case Brief

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Parties

DB Investments SA

Applicant

De Beers Consolidated Mines Ltd

Respondent

De Beers Centenary AG

Respondent

Procedural Posture

Large Merger / Merger Approval

Legal Issues

  1. 1 Does the proposed merger between DB Investments SA and the De Beers Group substantially lessen or prevent competition in any market?
  2. 2 Are there any public interest concerns, including employment or capital outflow, arising from the merger?
  3. 3 Does the vertical integration between Anglo and De Beers raise competition concerns?

Ratio Decidendi

The Tribunal found no product overlap between the activities of the merging parties, as Anglo's only interest in diamonds is through its investment in De Beers, and De Beers has no interests in other mining or natural resources sectors. Vertical integration concerns regarding tungsten carbide and industrial diamonds were investigated and found to be mitigated by arm's length transactions and the presence of alternative suppliers. Public interest concerns, particularly regarding employment, were addressed by the merging parties' undertaking that no job losses would result from the transaction, and the Tribunal found no evidence that the merger would affect employment conditions in either...

Court Disposition

Merger approved without conditions.

Orders

  • The merger between DB Investments SA and the De Beers Group is approved without conditions in terms of section 16(2)(a) of the Competition Act.
  • No change to employment conditions or job losses for De Beers employees as a result of this transaction.