Highveld Steel Vanadium Corp and Steelbank Merchants (26/LM/Dec99) [1999] ZACT 1 (4 October 1999)

Highveld Steel Vanadium Corp and Steelbank Merchants (26/LM/Dec99) [1999] ZACT 1 (4 October 1999)

The Tribunal found that the evidence presented by both the merging parties and the Commission was inconclusive regarding the precise definition of the relevant market and the degree of substitutability between new steel drums and other industrial containers. The structure of the purchase price and the conduct of the parties suggested a narrower market definition, but the lack of compelling evidence prevented a definitive conclusion. The Tribunal noted the absence of intervention by major purchasers, which could indicate the presence of effective substitutes or sufficient countervailing power. The Tribunal rejected the argument that Drumpak's failure justified approval of the merger but...

Citation
[1999] ZACT 1
Parties
Applicant: Highveld Steel and Vanadium Corporation Ltd; Applicant: Van Leer South Africa; Respondent: Steelbank Merchants (Pty) Ltd t/a Drumpak
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
4 October 1999
Case Number
06/LM/Oct99
Procedural Posture
Large Merger / Merger Approval
Outcome
Merger approved unconditionally.
Judges
D.H. Lewis, N.M. Manoim, P.E. Maponya
Legal Topics
Merger Control, Market Definition, Public Interest, Market Power, Restraint of Trade
Competition Law Commercial and Corporate Merger Control Market Definition Public Interest Market Power Restraint of Trade

Case Brief

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Parties

Highveld Steel and Vanadium Corporation Ltd

Applicant

Van Leer South Africa

Applicant

Steelbank Merchants (Pty) Ltd t/a Drumpak

Respondent

Procedural Posture

Large Merger / Merger Approval

Legal Issues

  1. 1 Whether the acquisition of Drumpak's assets by Rheem and Van Leer will substantially prevent or lessen competition in the relevant market.
  2. 2 How the relevant product and geographic market should be defined for the purposes of merger analysis.
  3. 3 Whether the transaction raises any significant public interest concerns.

Ratio Decidendi

The Tribunal found that the evidence presented by both the merging parties and the Commission was inconclusive regarding the precise definition of the relevant market and the degree of substitutability between new steel drums and other industrial containers. The structure of the purchase price and the conduct of the parties suggested a narrower market definition, but the lack of compelling evidence prevented a definitive conclusion. The Tribunal noted the absence of intervention by major purchasers, which could indicate the presence of effective substitutes or sufficient countervailing power. The Tribunal rejected the argument that Drumpak's failure justified approval of the merger but...

Court Disposition

Merger approved unconditionally.

Orders

  • The transaction is allowed to proceed without conditions.