K2015356066 (South Africa) (Pty) Ltd v Ferrochrome Production Assets of Asa Metals (Pty) Ltd (LM226Mar17) [2017] ZACT 22 (12 June 2017)

K2015356066 (South Africa) (Pty) Ltd v Ferrochrome Production Assets of Asa Metals (Pty) Ltd (LM226Mar17) [2017] ZACT 22 (12 June 2017)

The Tribunal found that the merged entity would have less than 15% of the global market for ferrochrome production and supply, with insignificant accretion and minimal market power. The target firm had ceased production prior to the merger, so it did not exert a competitive constraint. Vertical overlaps in chrome ore and electrode paste markets did not raise foreclosure concerns, as ASA Metals procured most inputs internally or from alternative suppliers. The retrenchments at ASA Metals were due to business rescue proceedings, not the merger, and the transaction would likely have a positive effect on employment as operations recommence. No other public interest concerns were identified....

Citation
[2017] ZACT 22
Parties
Applicant: K2015356066 (South Africa) (Pty) Ltd; Respondent: Ferrochrome Production Assets of Asa Metals (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
12 June 2017
Case Number
LM226Mar17
Procedural Posture
Merger Application / Approval
Outcome
The proposed merger is approved unconditionally.
Judges
Andiswa Ndoni, lmraan Valodia, Fiona Tregenna
Legal Topics
Merger Control, Horizontal Overlap, Vertical Overlap, Public Interest, Employment Effects
Competition Law Commercial and Corporate Merger Control Horizontal Overlap Vertical Overlap Public Interest Employment Effects

Case Brief

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Parties

K2015356066 (South Africa) (Pty) Ltd

Applicant

Ferrochrome Production Assets of Asa Metals (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Approval

Legal Issues

  1. 1 Whether the proposed merger will substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the merger raises public interest concerns, particularly regarding employment.
  3. 3 Whether horizontal and vertical overlaps create foreclosure or market power concerns.

Ratio Decidendi

The Tribunal found that the merged entity would have less than 15% of the global market for ferrochrome production and supply, with insignificant accretion and minimal market power. The target firm had ceased production prior to the merger, so it did not exert a competitive constraint. Vertical overlaps in chrome ore and electrode paste markets did not raise foreclosure concerns, as ASA Metals procured most inputs internally or from alternative suppliers. The retrenchments at ASA Metals were due to business rescue proceedings, not the merger, and the transaction would likely have a positive effect on employment as operations recommence. No other public interest concerns were identified....

Court Disposition

The proposed merger is approved unconditionally.

Orders

  • The merger between K2015356066 (South Africa) (Pty) Ltd and the ferrochrome production assets of ASA Metals (Pty) Ltd is approved without conditions.