Dis-Chem Distribution (Pty) Ltd v CT Distribution Centre (Pty) Ltd and Another (LM177Feb22) [2022] ZACT 94 (30 March 2022)

Dis-Chem Distribution (Pty) Ltd v CT Distribution Centre (Pty) Ltd and Another (LM177Feb22) [2022] ZACT 94 (30 March 2022)

The Tribunal found that the proposed merger presents no horizontal overlap, as Dis-Chem is not active in the market for rentable light industrial properties. The only vertical overlap arises because the target properties are currently leased to Dis-Chem Distribution. The Tribunal assessed the market for rentable light industrial property within a 15km radius of the KZN warehouse and CTDC, noting that the target properties have small market shares (approximately 2% each) and that alternative suppliers are present. There is no evidence of likely foreclosure or substantial lessening of competition. The Tribunal also found no employment concerns, as the target firms have no employees and...

Citation
[2022] ZACT 94
Parties
Applicant: Dis-Chem Distribution (Pty) Ltd; Respondent: CT Distribution Centre (Pty) Ltd; Respondent: KZN Warehouse (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
30 March 2022
Case Number
LM177Feb22
Procedural Posture
Merger Application / Order and Reasons
Outcome
Merger approved unconditionally; no conditions attached.
Judges
L Mncube, M Mazwai, I Valodia
Legal Topics
Large Merger, Vertical Merger, Foreclosure, Public Interest, Employment Effects
Competition Law Commercial and Corporate Large Merger Vertical Merger Foreclosure Public Interest Employment Effects

Case Brief

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Parties

Dis-Chem Distribution (Pty) Ltd

Applicant

CT Distribution Centre (Pty) Ltd

Respondent

KZN Warehouse (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Order and Reasons

Legal Issues

  1. 1 Whether the proposed merger will substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the merger raises any substantial public interest concerns, including employment and ownership spread.
  3. 3 Whether vertical effects, such as foreclosure, are likely to arise from the merger.

Ratio Decidendi

The Tribunal found that the proposed merger presents no horizontal overlap, as Dis-Chem is not active in the market for rentable light industrial properties. The only vertical overlap arises because the target properties are currently leased to Dis-Chem Distribution. The Tribunal assessed the market for rentable light industrial property within a 15km radius of the KZN warehouse and CTDC, noting that the target properties have small market shares (approximately 2% each) and that alternative suppliers are present. There is no evidence of likely foreclosure or substantial lessening of competition. The Tribunal also found no employment concerns, as the target firms have no employees and...

Court Disposition

Merger approved unconditionally; no conditions attached.

Orders

  • The merger between Dis-Chem Distribution (Pty) Ltd, CT Distribution Centre (Pty) Ltd, and KZN Warehouse (Pty) Ltd is approved in terms of section 16(2)(a) of the Competition Act, 1998.
  • A Merger Clearance Certificate is issued in terms of Competition Tribunal Rule 35(5)(a).