Investec Bank Ltd v RJ Southey (Pty) Ltd (128/LM/Nov07) [2009] ZACT 7; [2009] 1 CPLR 154 (CT) (30 January 2009)

Investec Bank Ltd v RJ Southey (Pty) Ltd (128/LM/Nov07) [2009] ZACT 7; [2009] 1 CPLR 154 (CT) (30 January 2009)

The Tribunal found that the merger, as initially proposed, was likely to result in the removal of an effective competitor in the affected markets and could facilitate coordinated effects due to Investec's cross-shareholding and board representation. The Tribunal determined that the original conditions recommended by the Commission were inadequate and required revision. The revised conditions mandated Investec to divest all shares in RJ Southey to an independent third party within a specified period and to waive all shareholder and voting rights in the interim. These conditions were deemed sufficient to address the competition concerns. The Tribunal approved the merger subject to these...

Citation
[2009] ZACT 7
Parties
Applicant: Investec Bank Ltd; Respondent: RJ Southey (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
30 January 2009
Case Number
128/LM/Nov07
Procedural Posture
Merger Control / Final Approval With Conditions and Subsequent Variation Application
Outcome
Merger approved subject to revised divestiture and non-influence conditions; subsequent variation to divestiture period granted, but request for Investec Corporate Finance to manage sale process refused.
Judges
N Manoim, Y Carrim, M Mokuena
Legal Topics
Merger Control, Coordinated Effects, Unilateral Effects, Divestiture Conditions, Market Definition
Competition Law Commercial and Corporate Merger Control Coordinated Effects Unilateral Effects Divestiture Conditions Market Definition

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Parties

Investec Bank Ltd

Applicant

RJ Southey (Pty) Ltd

Respondent

Procedural Posture

Merger Control / Final Approval With Conditions and Subsequent Variation Application

Legal Issues

  1. 1 Whether the proposed merger would substantially prevent or lessen competition in the markets for ship repair and marine blasting and painting.
  2. 2 Whether the merger would result in coordinated effects due to cross-shareholding and joint ventures.
  3. 3 Whether the conditions imposed adequately address competition concerns identified by the Commission.

Ratio Decidendi

The Tribunal found that the merger, as initially proposed, was likely to result in the removal of an effective competitor in the affected markets and could facilitate coordinated effects due to Investec's cross-shareholding and board representation. The Tribunal determined that the original conditions recommended by the Commission were inadequate and required revision. The revised conditions mandated Investec to divest all shares in RJ Southey to an independent third party within a specified period and to waive all shareholder and voting rights in the interim. These conditions were deemed sufficient to address the competition concerns. The Tribunal approved the merger subject to these...

Court Disposition

Merger approved subject to revised divestiture and non-influence conditions; subsequent variation to divestiture period granted, but request for Investec Corporate Finance to manage sale process refused.

Orders

  • Investec shall divest all shares in RJ Southey to an independent third party within the specified divestiture period.
  • Investec shall waive all shareholder and voting rights in RJ Southey and its subsidiaries until divestiture is effected.