ETG Chem FZE LLC v Cure-Chem South Africa (Pty) Ltd (LM114Nov21) [2022] ZACT 16; [2022] 1 CPLR 8 (CT) (28 March 2022)

ETG Chem FZE LLC v Cure-Chem South Africa (Pty) Ltd (LM114Nov21) [2022] ZACT 16; [2022] 1 CPLR 8 (CT) (28 March 2022)

The Tribunal found that the proposed merger between ETG Chem FZE LLC and Cure-Chem South Africa (Pty) Ltd does not give rise to any horizontal or vertical overlap, as the parties operate in distinct markets. The Commission's investigation confirmed that the target firm's imported chemicals are not used in the acquiring group's fertilizer blending activities, and no third parties raised concerns. The Tribunal concurred with the Commission's conclusion that the merger is unlikely to substantially prevent or lessen competition. Regarding public interest, the Tribunal noted the absence of HDP ownership in both firms and acknowledged the DTIC's concern about dilution of HDP ownership. The...

Citation
[2022] ZACT 16
Parties
Applicant: ETG Chem FZE LLC; Respondent: Cure-Chem South Africa (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
28 March 2022
Case Number
LM114Nov21
Procedural Posture
Large Merger / Merger Approval
Outcome
Merger conditionally approved subject to public interest undertakings.
Judges
I Valodia, E Daniels, L Mncube
Legal Topics
Large Merger Review, Public Interest Conditions, Hdp Ownership, Skills Development, Enterprise Development
Competition Law Large Merger Review Public Interest Conditions Hdp Ownership Skills Development Enterprise Development

Case Brief

Summary, issues, holding and outcome

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Parties

ETG Chem FZE LLC

Applicant

Cure-Chem South Africa (Pty) Ltd

Respondent

Procedural Posture

Large Merger / Merger 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 any significant public interest concerns, including employment and HDP ownership.
  3. 3 Whether conditions should be imposed to address public interest concerns.

Ratio Decidendi

The Tribunal found that the proposed merger between ETG Chem FZE LLC and Cure-Chem South Africa (Pty) Ltd does not give rise to any horizontal or vertical overlap, as the parties operate in distinct markets. The Commission's investigation confirmed that the target firm's imported chemicals are not used in the acquiring group's fertilizer blending activities, and no third parties raised concerns. The Tribunal concurred with the Commission's conclusion that the merger is unlikely to substantially prevent or lessen competition. Regarding public interest, the Tribunal noted the absence of HDP ownership in both firms and acknowledged the DTIC's concern about dilution of HDP ownership. The...

Court Disposition

Merger conditionally approved subject to public interest undertakings.

Orders

  • The merger between ETG Chem FZE LLC and Cure-Chem South Africa (Pty) Ltd is approved subject to the conditions set out in Annexure A.
  • The acquiring group must, within 48 months of the implementation date, increase expenditure on enterprise development, skills development, supplier development, and socio-economic development initiatives.