Jay and Jayendra (Pty) Ltd and Another v Lesedi Nuclear Services (Pty) Ltd (49/LM/Apr12) [2012] ZACT 57 (18 July 2012)

Jay and Jayendra (Pty) Ltd and Another v Lesedi Nuclear Services (Pty) Ltd (49/LM/Apr12) [2012] ZACT 57 (18 July 2012)

The Tribunal found that the merger does not result in horizontal or vertical overlaps, as the parties offer complementary services. Lesedi's market share in specialised engineering services is less than 5%, and there are several other competitors in the market. The non-compete clause does not create exclusive arrangements or obligations that would substantially lessen competition. The Tribunal accepted the Commission's view that sufficient competitors remain available to rivals. No adverse public interest concerns were identified, as there are no relevant South African employees affected and no other public interest issues arise. The merger is therefore unlikely to substantially prevent...

Citation
[2012] ZACT 57
Parties
Applicant: Jay and Jayendra (Pty) Ltd; Applicant: Group Five Construction (Pty) Ltd; Respondent: Lesedi Nuclear Services (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
18 July 2012
Case Number
49/LM/Apr12
Procedural Posture
Merger Approval / Final Decision
Outcome
Merger approved unconditionally.
Judges
Norman Manoim, Yasmin Carrim, Andreas Wessels
Legal Topics
Merger Control, Non Compete Clause, Joint Control, Public Interest, Market Share Analysis
Competition Law Commercial and Corporate Merger Control Non Compete Clause Joint Control Public Interest Market Share Analysis

Case Brief

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Parties

Jay and Jayendra (Pty) Ltd

Applicant

Group Five Construction (Pty) Ltd

Applicant

Lesedi Nuclear Services (Pty) Ltd

Respondent

Procedural Posture

Merger Approval / Final Decision

Legal Issues

  1. 1 Whether the proposed merger will substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the transaction raises any adverse public interest concerns.
  3. 3 Whether the non-compete clause in the shareholders' agreement restricts competition unlawfully.

Ratio Decidendi

The Tribunal found that the merger does not result in horizontal or vertical overlaps, as the parties offer complementary services. Lesedi's market share in specialised engineering services is less than 5%, and there are several other competitors in the market. The non-compete clause does not create exclusive arrangements or obligations that would substantially lessen competition. The Tribunal accepted the Commission's view that sufficient competitors remain available to rivals. No adverse public interest concerns were identified, as there are no relevant South African employees affected and no other public interest issues arise. The merger is therefore unlikely to substantially prevent...

Court Disposition

Merger approved unconditionally.

Orders

  • The proposed merger between Jay and Jayendra (Pty) Ltd, Group Five Construction (Pty) Ltd, and Lesedi Nuclear Services (Pty) Ltd is approved without conditions.