Foschini Group Limited v Tapestry Home Brands (Pty) Ltd (LM192Mar22) [2022] ZACT 22; [2022] 2 CPLR 37 (CT) (24 August 2022)

Foschini Group Limited v Tapestry Home Brands (Pty) Ltd (LM192Mar22) [2022] ZACT 22; [2022] 2 CPLR 37 (CT) (24 August 2022)

The Tribunal found that the proposed merger between The Foschini Group Limited and Tapestry Home Brands (Pty) Ltd would not substantially prevent or lessen competition in any relevant market. The parties' combined market shares were low, and the merged entity would continue to face significant competition from other market participants. The Tribunal concluded that neither horizontal nor vertical anticompetitive effects were likely, as the merged entity would not have the ability or incentive to foreclose competitors or customers. Public interest concerns, including employment and spread of ownership, were addressed through conditions requiring no retrenchments for three years and...

Citation
[2022] ZACT 22
Parties
Applicant: The Foschini Group Limited; Respondent: Tapestry Home Brands (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
24 August 2022
Case Number
LM192Mar22
Procedural Posture
Merger Control / Conditional Approval of Large Merger
Outcome
Merger conditionally approved subject to expansion and employment commitments.
Judges
L Mncube, Y Carrim, T Vilakazi
Legal Topics
Merger Control, Vertical and Horizontal Effects, Public Interest Conditions, Employment Effects, B Bbbee Shareholding, Market Definition
Competition Law Commercial and Corporate Merger Control Vertical and Horizontal Effects Public Interest Conditions Employment Effects B Bbbee Shareholding Market Definition

Case Brief

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Parties

The Foschini Group Limited

Applicant

Tapestry Home Brands (Pty) Ltd

Respondent

Procedural Posture

Merger Control / Conditional Approval of Large Merger

Legal Issues

  1. 1 Whether the proposed merger will substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the merger raises public interest concerns, including employment and spread of ownership.
  3. 3 Whether the merged entity will have the ability or incentive to engage in input or customer foreclosure.

Ratio Decidendi

The Tribunal found that the proposed merger between The Foschini Group Limited and Tapestry Home Brands (Pty) Ltd would not substantially prevent or lessen competition in any relevant market. The parties' combined market shares were low, and the merged entity would continue to face significant competition from other market participants. The Tribunal concluded that neither horizontal nor vertical anticompetitive effects were likely, as the merged entity would not have the ability or incentive to foreclose competitors or customers. Public interest concerns, including employment and spread of ownership, were addressed through conditions requiring no retrenchments for three years and...

Court Disposition

Merger conditionally approved subject to expansion and employment commitments.

Orders

  • The proposed transaction is approved subject to the conditions attached as Annexure A.
  • The merged entity must not retrench any employees as a result of the transaction for a period of at least three years.