Foschini Retail Group Proprietary Limited v The assets and business conducted by Edcon Limited (LM087Aug20) [2020] ZACT 38; [2020] 2 CPLR 749 (CT) (22 October 2020)

Foschini Retail Group Proprietary Limited v The assets and business conducted by Edcon Limited (LM087Aug20) [2020] ZACT 38; [2020] 2 CPLR 749 (CT) (22 October 2020)

The Tribunal found that the proposed acquisition would not substantially prevent or lessen competition in any of the relevant retail markets, including apparel, cell phones, homeware, cosmetics, and insurance products. Market shares post-merger remained below thresholds of concern, and sufficient competitors would continue to constrain the merged entity. The transaction would save a significant number of jobs and maintain local procurement levels, with conditions imposed to address public interest concerns raised by unions. The counterfactual scenario would be the closure of the Jet Division, resulting in greater job losses and negative supply chain impacts. The Tribunal concluded that...

Citation
[2020] ZACT 38
Parties
Applicant: Foschini Retail Group Proprietary Limited; Respondent: The assets and business conducted by Edcon Limited as a going concern under the "Jet" division
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
22 October 2020
Case Number
LM087Aug20
Procedural Posture
Merger Control / Reasons for Decision Following Conditional Approval
Outcome
Merger conditionally approved; transaction permitted subject to conditions.
Judges
M Mazwai, Y Carrim, E Daniels
Legal Topics
Merger Control, Public Interest, Market Definition, Employment Effects, Local Procurement, Horizontal Overlap
Competition Law Commercial and Corporate Merger Control Public Interest Market Definition Employment Effects Local Procurement Horizontal Overlap

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Parties

Foschini Retail Group Proprietary Limited

Applicant

The assets and business conducted by Edcon Limited as a going concern under the "Jet" division

Respondent

Procedural Posture

Merger Control / Reasons for Decision Following Conditional Approval

Legal Issues

  1. 1 Whether the proposed acquisition of the Jet Division by Foschini Retail Group would substantially prevent or lessen competition in the relevant retail markets.
  2. 2 Whether the transaction would have a positive or negative effect on employment and local procurement in South Africa.
  3. 3 Whether any public interest concerns, including the impact on small and medium businesses and historically disadvantaged persons, arise from the merger.

Ratio Decidendi

The Tribunal found that the proposed acquisition would not substantially prevent or lessen competition in any of the relevant retail markets, including apparel, cell phones, homeware, cosmetics, and insurance products. Market shares post-merger remained below thresholds of concern, and sufficient competitors would continue to constrain the merged entity. The transaction would save a significant number of jobs and maintain local procurement levels, with conditions imposed to address public interest concerns raised by unions. The counterfactual scenario would be the closure of the Jet Division, resulting in greater job losses and negative supply chain impacts. The Tribunal concluded that...

Court Disposition

Merger conditionally approved; transaction permitted subject to conditions.

Orders

  • The proposed transaction is approved subject to the conditions attached to the order.
  • At least 4664 employees from the Jet Division are to be transferred to the Foschini Group.