Gatsby SPV Ltd vs Cell C Ltd (LM004Apr20) [2020] ZACT 32; [2020] 1 CPLR 350 (CT) (15 June 2020)

Gatsby SPV Ltd vs Cell C Ltd (LM004Apr20) [2020] ZACT 32; [2020] 1 CPLR 350 (CT) (15 June 2020)

The Tribunal found that the proposed transaction, involving the acquisition of certain assets of Cell C by Gatsby SPV, would not substantially prevent or lessen competition in the relevant market. Gatsby SPV is a newly formed entity with no business activities, and the transaction would not result in horizontal or vertical overlaps. The Tribunal accepted the Commission's concerns regarding the uncertainty of the Trust's composition and the risk of anticompetitive information exchange or undisclosed overlaps. To address these risks, the Tribunal imposed conditions ensuring that neither competing firms nor current Cell C shareholders (except certain employees) would have an economic...

Citation
[2020] ZACT 32
Parties
Applicant: Gatsby Security SPV (Pty) Ltd; Respondent: Cell C Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
15 June 2020
Case Number
LM004Apr20
Procedural Posture
Large Merger / Conditional Approval
Outcome
The merger is approved subject to conditions.
Judges
E Daniels, A Ndoni, F Tregenna
Legal Topics
Merger Control, Conditional Approval, Failing Firm, Public Interest, Trust Structure
Competition Law Commercial and Corporate Merger Control Conditional Approval Failing Firm Public Interest Trust Structure

Case Brief

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Parties

Gatsby Security SPV (Pty) Ltd

Applicant

Cell C Ltd

Respondent

Procedural Posture

Large Merger / Conditional Approval

Legal Issues

  1. 1 Whether the proposed acquisition of Cell C's assets by Gatsby SPV would substantially prevent or lessen competition in the relevant market.
  2. 2 Whether the composition and control of the Trust and Gatsby SPV could give rise to competition concerns.
  3. 3 Whether the transaction raises any public interest concerns.

Ratio Decidendi

The Tribunal found that the proposed transaction, involving the acquisition of certain assets of Cell C by Gatsby SPV, would not substantially prevent or lessen competition in the relevant market. Gatsby SPV is a newly formed entity with no business activities, and the transaction would not result in horizontal or vertical overlaps. The Tribunal accepted the Commission's concerns regarding the uncertainty of the Trust's composition and the risk of anticompetitive information exchange or undisclosed overlaps. To address these risks, the Tribunal imposed conditions ensuring that neither competing firms nor current Cell C shareholders (except certain employees) would have an economic...

Court Disposition

The merger is approved subject to conditions.

Orders

  • The merger between Gatsby SPV and Cell C is approved subject to the conditions set out in Annexure A.
  • Gatsby SPV and the Trust shall not be owned or controlled by firms that compete or may compete with Cell C, or firms that have a vertical relationship with Cell C (other than a lending relationship).