Hitachi Data System Europe Holdings BV v Shoden Data Systems (Pty) Ltd (88/LM/Oct11) [2012] ZACT 6 (18 January 2012)

Hitachi Data System Europe Holdings BV v Shoden Data Systems (Pty) Ltd (88/LM/Oct11) [2012] ZACT 6 (18 January 2012)

The Tribunal found that the proposed transaction constitutes a vertical merger, as Hitachi Data Systems Europe Holdings BV is acquiring its sole value added reseller in South Africa. The Competition Commission's investigation confirmed that SDS is the only reseller of Hitachi products in South Africa, but there are alternative upstream suppliers such as EMC Corporation, IBM, and Hewlett-Packard, as well as multiple downstream distributors. The vertical integration is therefore unlikely to result in input or customer foreclosure. The Tribunal also found no adverse effects on employment or other public interest concerns. Accordingly, the merger was approved without conditions.

Citation
[2012] ZACT 6
Parties
Applicant: Hitachi Data Systems Europe Holdings BV; Respondent: Shoden Data Systems (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
18 January 2012
Case Number
88/LM/Oct11
Procedural Posture
Large Merger / Approval
Outcome
Merger approved without conditions.
Judges
Norman Manoim, Yasmin Carrim, Andreas Wessels
Legal Topics
Vertical Merger, Input Foreclosure, Market Structure, Public Interest, Employment Effects
Competition Law Commercial and Corporate Vertical Merger Input Foreclosure Market Structure Public Interest Employment Effects

Case Brief

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Parties

Hitachi Data Systems Europe Holdings BV

Applicant

Shoden Data Systems (Pty) Ltd

Respondent

Procedural Posture

Large Merger / Approval

Legal Issues

  1. 1 Whether the proposed acquisition constitutes a vertical merger with potential foreclosure concerns.
  2. 2 Whether the transaction raises any adverse public interest effects, including on employment.
  3. 3 Whether the merger should be approved without conditions.

Ratio Decidendi

The Tribunal found that the proposed transaction constitutes a vertical merger, as Hitachi Data Systems Europe Holdings BV is acquiring its sole value added reseller in South Africa. The Competition Commission's investigation confirmed that SDS is the only reseller of Hitachi products in South Africa, but there are alternative upstream suppliers such as EMC Corporation, IBM, and Hewlett-Packard, as well as multiple downstream distributors. The vertical integration is therefore unlikely to result in input or customer foreclosure. The Tribunal also found no adverse effects on employment or other public interest concerns. Accordingly, the merger was approved without conditions.

Court Disposition

Merger approved without conditions.

Orders

  • The proposed transaction is approved without conditions.