Industrial Electronic Investments Limited v CIE Telecommunications (Pty) Ltd (94/LM/Aug08) [2008] ZACT 109 (11 December 2008)

Industrial Electronic Investments Limited v CIE Telecommunications (Pty) Ltd (94/LM/Aug08) [2008] ZACT 109 (11 December 2008)

The Tribunal found that the combined post-merger market share of the merging parties in the horizontal market for electro technical contract manufacturing services would be 18%, with several credible competitors remaining. In vertical markets, although Dartcom and Ferrotech hold significant shares in certain product segments, the presence of strong competitors such as Emerson, Diesel Electric, Andrews Corporation, and Webb Industries mitigates the risk of foreclosure. The transaction does not increase existing vertical integration, as common shareholding already exists. No public interest concerns were identified. The merger is therefore unlikely to substantially prevent or lessen...

Citation
[2008] ZACT 109
Parties
Applicant: Industrial Electronic Investments Limited; Respondent: CIE Telecommunications (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
11 December 2008
Case Number
94/LM/Aug08
Procedural Posture
Merger Application / Reasons for Unconditional Approval of Merger
Outcome
Merger approved unconditionally.
Judges
N Manoim, Y Carrim, M Mokuena
Legal Topics
Merger Control, Horizontal Overlap, Vertical Integration, Market Share Analysis, Foreclosure, Public Interest
Competition Law Commercial and Corporate Merger Control Horizontal Overlap Vertical Integration Market Share Analysis Foreclosure Public Interest

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Parties

Industrial Electronic Investments Limited

Applicant

CIE Telecommunications (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Reasons for Unconditional Approval of Merger

Legal Issues

  1. 1 Whether the proposed merger between Industrial Electronic Investments Limited and CIE Telecommunications (Pty) Ltd would substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the merger would result in foreclosure in horizontal or vertical markets.
  3. 3 Whether there are any public interest concerns arising from the transaction.

Ratio Decidendi

The Tribunal found that the combined post-merger market share of the merging parties in the horizontal market for electro technical contract manufacturing services would be 18%, with several credible competitors remaining. In vertical markets, although Dartcom and Ferrotech hold significant shares in certain product segments, the presence of strong competitors such as Emerson, Diesel Electric, Andrews Corporation, and Webb Industries mitigates the risk of foreclosure. The transaction does not increase existing vertical integration, as common shareholding already exists. No public interest concerns were identified. The merger is therefore unlikely to substantially prevent or lessen...

Court Disposition

Merger approved unconditionally.

Orders

  • The merger between Industrial Electronic Investments Limited and CIE Telecommunications (Pty) Ltd is approved without conditions.