Devland Cash and Carry (Pty) Ltd v Certain stores of Masscash (Pty) Ltd (LM163Dev20) [2021] ZACT 22 (24 March 2021)

Devland Cash and Carry (Pty) Ltd v Certain stores of Masscash (Pty) Ltd (LM163Dev20) [2021] ZACT 22 (24 March 2021)

The Tribunal found that the proposed transaction would not substantially prevent or lessen competition in any of the relevant grocery retail or wholesale markets, as the merged entity's market shares would remain low and significant competitors would continue to constrain its market power. The Tribunal also determined that the transaction would not result in any retrenchments, as the parties undertook to retain all affected employees and agreed to a nine-month moratorium on retrenchments post-implementation. Furthermore, the transaction would increase the spread of ownership by HDPs, as the acquiring firm is HDP-owned while the target stores are not. The merger was therefore approved...

Citation
[2021] ZACT 22
Parties
Applicant: Devland Cash and Carry (Pty) Ltd; Respondent: Certain stores of Masscash (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
24 March 2021
Case Number
LM163Dev20
Procedural Posture
Merger Application / Conditional Approval
Outcome
Merger conditionally approved subject to a nine-month moratorium on retrenchments and compliance monitoring.
Judges
Y Carrim, E Daniels, F Tregenna
Legal Topics
Merger Control, Public Interest Conditions, Employment Protection, Spread of Ownership
Competition Law Commercial and Corporate Merger Control Public Interest Conditions Employment Protection Spread of Ownership

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 2 Authorities cited 2 Party arguments 2
Sign in to unlock

Parties

Devland Cash and Carry (Pty) Ltd

Applicant

Certain stores of Masscash (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Conditional Approval

Legal Issues

  1. 1 Whether the proposed acquisition of certain Masscash stores by Devland Cash and Carry will substantially prevent or lessen competition in the relevant grocery retail and wholesale markets.
  2. 2 Whether the transaction raises any public interest concerns, particularly regarding employment and the spread of ownership by Historically Disadvantaged Persons (HDPs).

Ratio Decidendi

The Tribunal found that the proposed transaction would not substantially prevent or lessen competition in any of the relevant grocery retail or wholesale markets, as the merged entity's market shares would remain low and significant competitors would continue to constrain its market power. The Tribunal also determined that the transaction would not result in any retrenchments, as the parties undertook to retain all affected employees and agreed to a nine-month moratorium on retrenchments post-implementation. Furthermore, the transaction would increase the spread of ownership by HDPs, as the acquiring firm is HDP-owned while the target stores are not. The merger was therefore approved...

Court Disposition

Merger conditionally approved subject to a nine-month moratorium on retrenchments and compliance monitoring.

Orders

  • The merger is approved subject to the condition that no employees shall be retrenched for a period of nine months from the implementation date, except for specified exclusions such as voluntary separation, early retirement, or lawful operational requirements unrelated to the merger.
  • The merging parties must circulate the conditions to all employees within five days of approval and provide proof of compliance to the Commission.