FFS Refiners (Pty) Ltd v OTGC Terminal (Pty) Ltd (LM010Apr21) [2021] ZACT 45 (23 June 2021)

FFS Refiners (Pty) Ltd v OTGC Terminal (Pty) Ltd (LM010Apr21) [2021] ZACT 45 (23 June 2021)

The Tribunal found that the merger between FFS Refiners and OTGC Terminals would not result in any substantial prevention or lessening of competition, as the parties' facilities serve distinct markets and there are no horizontal or vertical overlaps. Concerns about switching to hazardous storage and merger-related retrenchments were investigated and found to be unsubstantiated. To address any potential rationalisation and public interest concerns, the Tribunal imposed a two-year moratorium on merger-specific retrenchments and required preference for previously retrenched employees in future recruitment. The merger also increases Black and Black female ownership in the relevant market. The...

Citation
[2021] ZACT 45
Parties
Applicant: FFS Refiners (Pty) Ltd; Respondent: OTGC Terminals (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
23 June 2021
Case Number
LM010Apr21
Procedural Posture
Merger Application / Final Determination
Outcome
Merger conditionally approved subject to public interest and employment-related conditions.
Judges
Y Carrim, AW Wessels, H Cheadle
Legal Topics
Large Merger, Public Interest Conditions, Employment Protection, Black Ownership, Bulk Liquid Storage
Competition Law Commercial and Corporate Large Merger Public Interest Conditions Employment Protection Black Ownership Bulk Liquid Storage

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Parties

FFS Refiners (Pty) Ltd

Applicant

OTGC Terminals (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Final Determination

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 public interest concerns, particularly regarding employment and ownership.
  3. 3 Whether merger-specific retrenchments should be prohibited for a defined period post-merger.

Ratio Decidendi

The Tribunal found that the merger between FFS Refiners and OTGC Terminals would not result in any substantial prevention or lessening of competition, as the parties' facilities serve distinct markets and there are no horizontal or vertical overlaps. Concerns about switching to hazardous storage and merger-related retrenchments were investigated and found to be unsubstantiated. To address any potential rationalisation and public interest concerns, the Tribunal imposed a two-year moratorium on merger-specific retrenchments and required preference for previously retrenched employees in future recruitment. The merger also increases Black and Black female ownership in the relevant market. The...

Court Disposition

Merger conditionally approved subject to public interest and employment-related conditions.

Orders

  • The merger between FFS Refiners (Pty) Ltd and OTGC Terminals (Pty) Ltd is approved subject to the conditions set out in Annexure A.
  • A Merger Clearance Certificate is to be issued in terms of Competition Tribunal rule 35(5)(a).