Dunns Stores (Pty) Limited and Shoe City Holdings (Pty) Limited (38/LM/May05) [2005] ZACT 44 (24 June 2005)

Dunns Stores (Pty) Limited and Shoe City Holdings (Pty) Limited (38/LM/May05) [2005] ZACT 44 (24 June 2005)

The Tribunal found that the combined post-merger market share of Pepkor and Shoe City would be 23.4% in the broader footwear market, making the merged entity the third largest retailer after Edcon and Woolworths. The increase in market share was considered relatively low, and the presence of other major competitors indicated that competition would remain in the market. The Tribunal also noted that no job losses were anticipated as a result of the merger. Accordingly, the Tribunal concluded that the merger would not substantially prevent or lessen competition, nor would it negatively impact the public interest. The merger was therefore approved unconditionally.

Citation
[2005] ZACT 44
Parties
Applicant: Dunns Stores (Pty) Limited; Respondent: Shoe City Holdings (Pty) Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
24 June 2005
Case Number
38/LM/May05
Procedural Posture
Large Merger / Merger Clearance
Outcome
Merger approved unconditionally.
Judges
David Lewis, Norman Manoim, Yasmin Carrim
Legal Topics
Large Merger Review, Market Share Analysis, Public Interest, Retail Footwear Market
Competition Law Large Merger Review Market Share Analysis Public Interest Retail Footwear Market

Case Brief

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Parties

Dunns Stores (Pty) Limited

Applicant

Shoe City Holdings (Pty) Limited

Respondent

Procedural Posture

Large Merger / Merger Clearance

Legal Issues

  1. 1 Whether the proposed merger between Dunns Stores (Pty) Limited and Shoe City Holdings (Pty) Limited would substantially prevent or lessen competition in the retail footwear market.
  2. 2 Whether the merger raises public interest concerns, including potential job losses.

Ratio Decidendi

The Tribunal found that the combined post-merger market share of Pepkor and Shoe City would be 23.4% in the broader footwear market, making the merged entity the third largest retailer after Edcon and Woolworths. The increase in market share was considered relatively low, and the presence of other major competitors indicated that competition would remain in the market. The Tribunal also noted that no job losses were anticipated as a result of the merger. Accordingly, the Tribunal concluded that the merger would not substantially prevent or lessen competition, nor would it negatively impact the public interest. The merger was therefore approved unconditionally.

Court Disposition

Merger approved unconditionally.

Orders

  • The merger between Dunns Stores (Pty) Limited and Shoe City Holdings (Pty) Limited is approved without conditions.