Investec Bank Limited v Ferro South Africa (Pty) Ltd (LM086Jul15) [2015] ZACT 101 (27 October 2015)

Investec Bank Limited v Ferro South Africa (Pty) Ltd (LM086Jul15) [2015] ZACT 101 (27 October 2015)

The Tribunal found that the proposed transaction does not result in horizontal overlap, as Investec and Ferro operate in distinct markets. Although a vertical relationship exists due to Investec's non-controlling interest in Modek, the evidence showed that Investec lacks sufficient control to influence Modek's purchasing decisions. Market participants confirmed the availability of alternative customers and suppliers, mitigating any foreclosure risk. The Commission's investigation revealed no substantial prevention or lessening of competition, and no negative public interest effects, including on employment. The Tribunal concurred with the Commission's findings and approved the merger...

Citation
[2015] ZACT 101
Parties
Applicant: Investec Bank Limited; Respondent: Ferro South Africa (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
27 October 2015
Case Number
LM086Jul15
Procedural Posture
Merger Approval / Final Decision
Outcome
Merger approved unconditionally.
Judges
Norman Manoim, Medi Mokuena, lmraan Valodia
Legal Topics
Large Merger, Vertical Overlap, Foreclosure Concerns, Public Interest, Shareholding Increase
Competition Law Commercial and Corporate Large Merger Vertical Overlap Foreclosure Concerns Public Interest Shareholding Increase

Case Brief

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Parties

Investec Bank Limited

Applicant

Ferro South Africa (Pty) Ltd

Respondent

Procedural Posture

Merger Approval / Final Decision

Legal Issues

  1. 1 Whether the proposed merger between Investec Bank Limited and Ferro South Africa (Pty) Ltd will substantially prevent or lessen competition in the relevant market.
  2. 2 Whether the transaction raises any public interest concerns, including impact on employment.
  3. 3 Whether Investec's increased shareholding in Ferro creates foreclosure risks for competitors.

Ratio Decidendi

The Tribunal found that the proposed transaction does not result in horizontal overlap, as Investec and Ferro operate in distinct markets. Although a vertical relationship exists due to Investec's non-controlling interest in Modek, the evidence showed that Investec lacks sufficient control to influence Modek's purchasing decisions. Market participants confirmed the availability of alternative customers and suppliers, mitigating any foreclosure risk. The Commission's investigation revealed no substantial prevention or lessening of competition, and no negative public interest effects, including on employment. The Tribunal concurred with the Commission's findings and approved the merger...

Court Disposition

Merger approved unconditionally.

Orders

  • The large merger between Investec Bank Limited and Ferro South Africa (Pty) Ltd is approved without conditions.