Imerys South Africa (Pty) Ltd and Another v Competition Commission (147/CAC/Oct16, IM013May15) [2017] ZACAC 1; [2017] 1 CPLR 33 (CAC) (2 March 2017)

Imerys South Africa (Pty) Ltd and Another v Competition Commission (147/CAC/Oct16, IM013May15) [2017] ZACAC 1; [2017] 1 CPLR 33 (CAC) (2 March 2017)

The Court held that the Tribunal was entitled to prohibit the merger, as the proposed conditions did not adequately address all reasonably possible scenarios of substantial lessening of competition. The merger would irreversibly change the market structure from duopoly to monopoly, and the conditions offered—time-bound supply agreements and perpetual export parity price caps—could not guarantee the absence of anti-competitive effects, especially in the event of market shocks or capacity expansion. The Tribunal was not obliged to approve the merger simply because the conditions were more likely than not to remedy the effects; it could prohibit the merger if there was a reasonable...

Citation
[2017] ZACAC 1
Parties
Appellant: Imerys South Africa (Pty) Ltd; Appellant: Andalusite Resources (Pty) Ltd; Respondent: Competition Commission
Court
Competition Appeal Court
Jurisdiction
South Africa
Judgment Date
2 March 2017
Case Number
147/CAC/Oct16
Procedural Posture
Civil Appeal / Appeal From Competition Tribunal Prohibition of Merger
Outcome
Appeal dismissed; Tribunal’s prohibition of the merger confirmed.
Judges
Davis, Rogers, Boqwana
Legal Topics
Merger Control, Substantial Lessening of Competition, Burden of Proof, Public Interest Override, Conditional Approval, Market Definition
Competition Law Commercial and Corporate Merger Control Substantial Lessening of Competition Burden of Proof Public Interest Override Conditional Approval Market Definition

Case Brief

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Parties

Imerys South Africa (Pty) Ltd

Appellant

Andalusite Resources (Pty) Ltd

Appellant

Competition Commission

Respondent

Procedural Posture

Civil Appeal / Appeal From Competition Tribunal Prohibition of Merger

Legal Issues

  1. 1 Whether the proposed merger between Imerys South Africa and Andalusite Resources would likely result in a substantial lessening of competition in the domestic andalusite market.
  2. 2 Whether the Tribunal correctly rejected conditional approval of the merger subject to supply and price conditions.
  3. 3 What is the correct approach to the burden of proof and standard for 'likely' substantial lessening of competition under s 12A(1) of the Competition Act.

Ratio Decidendi

The Court held that the Tribunal was entitled to prohibit the merger, as the proposed conditions did not adequately address all reasonably possible scenarios of substantial lessening of competition. The merger would irreversibly change the market structure from duopoly to monopoly, and the conditions offered—time-bound supply agreements and perpetual export parity price caps—could not guarantee the absence of anti-competitive effects, especially in the event of market shocks or capacity expansion. The Tribunal was not obliged to approve the merger simply because the conditions were more likely than not to remedy the effects; it could prohibit the merger if there was a reasonable...

Court Disposition

Appeal dismissed; Tribunal’s prohibition of the merger confirmed.

Orders

  • The appeal is dismissed with costs, including those attendant on the employment of two counsel.