Ford Motor Company and South African Motor Corporation (Pty) Ltd (23/LM/Feb00) [2000] ZACT 14 (14 April 2000)
- Citation
- [2000] ZACT 14
- Status
- Judgment
- Jurisdiction
- South Africa
- Court
- Competition Tribunal
- Panel
- N.M. Manoim, D.H. Lewis, S. Zilwa
- Case number
- 23/LM/Feb00
More details
- Court
- Competition Tribunal
- Panel
- N.M. Manoim, D.H. Lewis, S. Zilwa
- Case number
- 23/LM/Feb00
On this page
Professional case brief
Research organized from the available case record
01
Holding and result
The Tribunal found that the merger would not affect competition in any relevant product market because Ford is only increasing its shareholding in Samcor, where it already holds a significant interest. Ford does not supply products or services in South Africa other than through Samcor and Ford Credit SA. The Tribunal was satisfied that the merger does not raise any public interest concerns listed in section 16(3) of the Competition Act. Accordingly, the merger was approved without conditions.
Court disposition
Merger approved without conditions.
Orders
- The merger between Ford Motor Company and South African Motor Corporation (Pty) Ltd is approved without conditions.
- A Merger Clearance Certificate is issued.
02
Material facts
Parties
Ford Motor Company
ApplicantSouth African Motor Corporation (Pty) Ltd
RespondentAmounts and remedies
- Samcor Shareholding Acquired by Ford From Anglo South Africa: ZAR 45
- Samcor Shareholding Acquired by Ford From Samcor Employees Trust: ZAR 10
03
Procedural history
Posture
Merger Clearance / Decision on Approval
04
Questions and positions
Legal issues
- 01
Does the proposed merger substantially prevent or lessen competition in any relevant market?
- 02
Does the merger raise any public interest concerns under section 16(3) of the Competition Act?
Party arguments
- Applicant
- Ford argued that the transaction merely increases its shareholding in Samcor, where it already holds a significant interest, and that the business will continue as before, with no reduction in staff or change in operations.
- Respondent
- The Competition Commission submitted that the merger would not affect competition in any relevant product market, as Ford is only increasing its shareholding in Samcor and does not supply products or services in South Africa outside its interests in Samcor and Ford Credit SA.
05
Court’s reasoning
Legal principles
- 01
Competition Act, section 16(3)
A merger may not be approved if it substantially prevents or lessens competition, unless justified by technological, efficiency, or other pro-competitive gains.
- 02
Competition Act, section 16(3)
Public interest concerns must be considered in merger evaluation, including employment and impact on particular industries or regions.
06
Ratio, limits and disposition
Ratio decidendi
The Tribunal found that the merger would not affect competition in any relevant product market because Ford is only increasing its shareholding in Samcor, where it already holds a significant interest. Ford does not supply products or services in South Africa other than through Samcor and Ford Credit SA. The Tribunal was satisfied that the merger does not raise any public interest concerns listed in section 16(3) of the Competition Act. Accordingly, the merger was approved without conditions.
Obiter and limits
- Ford intends to continue conducting business in South Africa in substantially the same manner as before the transaction.
- There will be no decrease in staffing levels or change in the type of business performed by Samcor as a result of the merger.
Court disposition
Merger approved without conditions.
- The merger between Ford Motor Company and South African Motor Corporation (Pty) Ltd is approved without conditions.
- A Merger Clearance Certificate is issued.
Source and reliance status
Competition Tribunal
This page organises the available record for research. Confirm quotations, current status, and subsequent treatment against the official source before relying on the case.
Judgment reading view
Judgment text
The complete available source text.
Competition Tribunal
Judgment
COMPETITION
TRIBUNAL
REPUBLIC
OF SOUTH AFRICA
Case Number: 23/LM/Feb00
In the large merger between
Ford Motor Company
and
South African Motor Corporation (Pty) Ltd
Reasons for the Competition Tribunalâs Decision
Approval
The Competition Tribunal issued a Merger Clearance Certificate on 5 April 2000 approving the merger between Ford Motor Company and South African Motor Corporation (Pty) Ltd (Samcor) without conditions. The reasons for our decision to approve the merger are set out below.
The merger transaction
Ford is purchasing all the issued and outstanding shares in Samcor held by Anglo South Africa (Pty) Ltd and the Samcor Employees Trust (SET). Anglo South Africa holds 45% and SET 10% of the shares in Samcor, with the balance held by the Ford Motor Company. The transaction will be completed in two stages and will be finalized by 31 December 2001. Samcor will become a wholly owned subsidiary of Ford upon purchase by Ford of all the shares currently held by Anglo South Africa and SET.
Ford intends to continue to conduct the business of Ford (through Samcor and Ford Credit SA) in substantially the same manner as was conducted prior to the transaction. Ford does not intend to decrease the staffing level, type of business performed or the way in which Samcorâs business operates in South Africa.
Evaluating the merger
Ford, which is the second largest motor manufacturer in the world, is active in South Africa only in respect of its sales to Samcor and by virtue of its interests in Samcor and Ford Credit SA. Ford does not supply products or services in South Africa other than to these two companies.
The Tribunal agrees with the Competition Commission that the transaction would not affect competition in any of the relevant product markets because Ford is only increasing its shareholding in Samcor in which it is already holding a significant interest. The Tribunal is also satisfied that the merger does not raise any public interest concerns listed in section 16(3).
N.M. Manoim Date
Concurring: D.H. Lewis and S. Zilwa
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