DSV South Africa (Pty) Ltd v Globeflight Worldwide Express SA (Pty) Ltd (LM169Dec20) [2021] ZACT 56 (24 August 2021)

DSV South Africa (Pty) Ltd v Globeflight Worldwide Express SA (Pty) Ltd (LM169Dec20) [2021] ZACT 56 (24 August 2021)

The Tribunal found that the proposed merger between DSV South Africa and Globeflight Worldwide Express was unlikely to substantially prevent or lessen competition in the national market for courier services. The market is highly fragmented, with low barriers to entry and significant countervailing power among customers. Although the merger would result in some retrenchments, the number was reduced from 522 to 205 after engagement with stakeholders, representing only 2.5% of the combined workforce. The Tribunal was satisfied that a rational process was followed to identify affected employees and that conditions imposed—including a three-year moratorium on retrenchments, re-skilling funds,...

Citation
[2021] ZACT 56
Parties
Applicant: DSV South Africa (Pty) Ltd; Respondent: Globeflight Worldwide Express SA (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
24 August 2021
Case Number
LM169Dec20
Procedural Posture
Large Merger Application / Reasons for Decision After Conditional Approval
Outcome
Merger conditionally approved subject to public interest conditions.
Judges
M Mazwai, E Daniels, A Ndoni
Legal Topics
Large Merger Review, Public Interest Conditions, Employment Effects, Spread of Ownership, Market Definition, Removal of Effective Competitor
Competition Law Commercial and Corporate Large Merger Review Public Interest Conditions Employment Effects Spread of Ownership Market Definition Removal of Effective Competitor

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Parties

DSV South Africa (Pty) Ltd

Applicant

Globeflight Worldwide Express SA (Pty) Ltd

Respondent

Procedural Posture

Large Merger Application / Reasons for Decision After Conditional Approval

Legal Issues

  1. 1 Whether the proposed merger is likely to substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the merger raises substantial public interest concerns, particularly regarding employment and spread of ownership.
  3. 3 Whether the conditions imposed adequately address identified public interest concerns.

Ratio Decidendi

The Tribunal found that the proposed merger between DSV South Africa and Globeflight Worldwide Express was unlikely to substantially prevent or lessen competition in the national market for courier services. The market is highly fragmented, with low barriers to entry and significant countervailing power among customers. Although the merger would result in some retrenchments, the number was reduced from 522 to 205 after engagement with stakeholders, representing only 2.5% of the combined workforce. The Tribunal was satisfied that a rational process was followed to identify affected employees and that conditions imposed—including a three-year moratorium on retrenchments, re-skilling funds,...

Court Disposition

Merger conditionally approved subject to public interest conditions.

Orders

  • The merger is approved subject to the following conditions:
  • A maximum of 205 retrenchments is permitted, with a three-year moratorium on further retrenchments from the implementation date.