Evening Star Trading 431 (Pty) Ltd and Fraser Alexander Holdings (Pty) Ltd (103/LM/Oct05) [2006] ZACT 3 (18 January 2006)

Evening Star Trading 431 (Pty) Ltd and Fraser Alexander Holdings (Pty) Ltd (103/LM/Oct05) [2006] ZACT 3 (18 January 2006)

The Tribunal found that the merger between Evening Star Trading 431 (Pty) Ltd and Fraser Alexander Holdings (Pty) Ltd is a vertical transaction with no overlap in activities. Although Fraser Alexander is a major player in several upstream markets, sufficient alternative suppliers exist, and mining companies can also perform these services in-house. Only a small proportion of Fraser Alexander's income is derived from Royal Bafokeng Nation mines, and there is no incentive for foreclosure or anti-competitive conduct. Royal Bafokeng Nation is not a mining operator but an investor, further reducing the risk of anti-competitive strategies. The transaction will result in Fraser Alexander...

Citation
[2006] ZACT 3
Parties
Applicant: Evening Star Trading 431 (Pty) Ltd; Respondent: Fraser Alexander Holdings (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
18 January 2006
Case Number
103/LM/Oct05
Procedural Posture
Large Merger / Approval
Outcome
Merger approved without conditions.
Judges
N Manoim, L Reyburn, M Mokuena
Legal Topics
Vertical Merger, Market Share Analysis, Foreclosure, Public Interest, Mining Charter Compliance
Competition Law Commercial and Corporate Vertical Merger Market Share Analysis Foreclosure Public Interest Mining Charter Compliance

Case Brief

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Parties

Evening Star Trading 431 (Pty) Ltd

Applicant

Fraser Alexander Holdings (Pty) Ltd

Respondent

Procedural Posture

Large Merger / Approval

Legal Issues

  1. 1 Whether the proposed vertical merger would substantially prevent or lessen competition in the relevant upstream and downstream markets.
  2. 2 Whether the transaction raises any public interest concerns, including effects on employment or compliance with the Mining Charter.

Ratio Decidendi

The Tribunal found that the merger between Evening Star Trading 431 (Pty) Ltd and Fraser Alexander Holdings (Pty) Ltd is a vertical transaction with no overlap in activities. Although Fraser Alexander is a major player in several upstream markets, sufficient alternative suppliers exist, and mining companies can also perform these services in-house. Only a small proportion of Fraser Alexander's income is derived from Royal Bafokeng Nation mines, and there is no incentive for foreclosure or anti-competitive conduct. Royal Bafokeng Nation is not a mining operator but an investor, further reducing the risk of anti-competitive strategies. The transaction will result in Fraser Alexander...

Court Disposition

Merger approved without conditions.

Orders

  • The large merger between Evening Star Trading 431 (Pty) Ltd and Fraser Alexander Holdings (Pty) Ltd is approved.
  • No conditions are imposed on the approval.