General Electric Company v Baker Hughes Incorporated (LM194Jan17) [2017] ZACT 40 (13 April 2017)

General Electric Company v Baker Hughes Incorporated (LM194Jan17) [2017] ZACT 40 (13 April 2017)

The Tribunal found that there is no overlap between the merging parties' activities at the individual product or service level in South Africa. Procurement practices in the oil and gas industry are such that products and services are sourced separately through tenders, and not as bundles. The presence of large global competitors further mitigates any potential anti-competitive effects. The Tribunal accepted the Commission's conclusion that the merger is unlikely to substantially prevent or lessen competition in any relevant market. Additionally, there are no adverse public interest effects, including on employment. Accordingly, the merger was approved unconditionally.

Citation
[2017] ZACT 40
Parties
Applicant: General Electric Company; Respondent: Baker Hughes Incorporated
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
13 April 2017
Case Number
LM194Jan17
Procedural Posture
Merger Control / Approval of Proposed Merger
Outcome
Merger approved unconditionally.
Judges
AW Wessels, Enver Daniels, lmraan Valodia
Legal Topics
Merger Control, Market Definition, Bundling, Public Interest, Employment Effects
Competition Law Commercial and Corporate Merger Control Market Definition Bundling Public Interest Employment Effects

Case Brief

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Parties

General Electric Company

Applicant

Baker Hughes Incorporated

Respondent

Procedural Posture

Merger Control / Approval of Proposed Merger

Legal Issues

  1. 1 Whether the proposed merger between General Electric Company and Baker Hughes Incorporated would substantially prevent or lessen competition in any relevant market in South Africa.
  2. 2 Whether the merger raises any public interest concerns, including adverse effects on employment.

Ratio Decidendi

The Tribunal found that there is no overlap between the merging parties' activities at the individual product or service level in South Africa. Procurement practices in the oil and gas industry are such that products and services are sourced separately through tenders, and not as bundles. The presence of large global competitors further mitigates any potential anti-competitive effects. The Tribunal accepted the Commission's conclusion that the merger is unlikely to substantially prevent or lessen competition in any relevant market. Additionally, there are no adverse public interest effects, including on employment. Accordingly, the merger was approved unconditionally.

Court Disposition

Merger approved unconditionally.

Orders

  • The proposed transaction between General Electric Company and Baker Hughes Incorporated is approved without conditions.