Fabvest Investment Holding Limited and National Cereal Holdings (Pty) Ltd (09/LM/Feb01) [2001] ZACT 8 (19 March 2001)

Fabvest Investment Holding Limited and National Cereal Holdings (Pty) Ltd (09/LM/Feb01) [2001] ZACT 8 (19 March 2001)

The Tribunal found that the merger would not result in any product overlap or change in the competitive dynamics of the relevant market, as Fabvest and National Cereal Holdings operate in fundamentally different sectors. Fabvest's increased shareholding is primarily to reinforce its commitment to black economic empowerment, and BOE's exit allows it to focus on its financial business. The Tribunal agreed with the Commission that the merger would not substantially lessen or prevent competition in any market, and there were no public interest considerations that would alter this conclusion. Accordingly, the merger was approved without conditions.

Citation
[2001] ZACT 8
Parties
Applicant: Fabvest Investment Holding Limited; Respondent: National Cereal Holdings (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
19 March 2001
Case Number
09/LM/Feb01
Procedural Posture
Large Merger Review / Merger Clearance
Outcome
Merger approved without conditions.
Judges
N. Manoim, D. H. Lewis, P. Maponya
Legal Topics
Large Merger, Substantial Lessening of Competition, Public Interest, Black Economic Empowerment
Competition Law Large Merger Substantial Lessening of Competition Public Interest Black Economic Empowerment

Case Brief

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Parties

Fabvest Investment Holding Limited

Applicant

National Cereal Holdings (Pty) Ltd

Respondent

Procedural Posture

Large Merger Review / Merger Clearance

Legal Issues

  1. 1 Whether the proposed merger would result in a substantial lessening or prevention of competition in any market.
  2. 2 Whether there are any public interest considerations that would affect the approval of the merger.

Ratio Decidendi

The Tribunal found that the merger would not result in any product overlap or change in the competitive dynamics of the relevant market, as Fabvest and National Cereal Holdings operate in fundamentally different sectors. Fabvest's increased shareholding is primarily to reinforce its commitment to black economic empowerment, and BOE's exit allows it to focus on its financial business. The Tribunal agreed with the Commission that the merger would not substantially lessen or prevent competition in any market, and there were no public interest considerations that would alter this conclusion. Accordingly, the merger was approved without conditions.

Court Disposition

Merger approved without conditions.

Orders

  • The merger between Fabvest Investment Holding Limited and National Cereal Holdings (Pty) Ltd is approved without conditions.
  • A merger clearance certificate is issued in terms of section 16(2)(a) of the Competition Act.