K2020704995 (South Africa) (Pty) Ltd v Comair Ltd (In Business Rescue) (LM137Oct20) [2020] ZACT 71 (22 December 2020)

K2020704995 (South Africa) (Pty) Ltd v Comair Ltd (In Business Rescue) (LM137Oct20) [2020] ZACT 71 (22 December 2020)

The Tribunal found that the proposed merger would not result in any horizontal or vertical overlap, as Bidco and its shareholders do not compete with Comair or participate in the same supply chain. Therefore, the transaction would not substantially prevent or lessen competition in any relevant market. The Tribunal further held that the public interest concerns regarding employment and ownership spread were adequately addressed by the merger conditions, which capped retrenchments at 200 employees, required offers of employment to retrenched staff, and mandated the implementation of a broad-based black economic empowerment initiative and employee share ownership program. The Tribunal...

Citation
[2020] ZACT 71
Parties
Applicant: K2020704995 (South Africa) (Pty) Ltd; Respondent: Comair Ltd (In Business Rescue); Respondent: Competition Commission
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
22 December 2020
Case Number
LM137Oct20
Procedural Posture
Merger Application / Reasons for Conditional Approval of Merger
Outcome
Merger conditionally approved subject to public interest and ownership spread conditions.
Judges
Y Carrim, E Daniels, AW Wessels
Legal Topics
Merger Control, Public Interest, Broad Based Black Economic Empowerment, Employee Share Ownership Program, Retrenchment, Air Service Licensing
Competition Law Commercial and Corporate Merger Control Public Interest Broad Based Black Economic Empowerment Employee Share Ownership Program Retrenchment Air Service Licensing

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Parties

K2020704995 (South Africa) (Pty) Ltd

Applicant

Comair Ltd (In Business Rescue)

Respondent

Competition Commission

Respondent

Procedural Posture

Merger Application / Reasons for Conditional Approval of Merger

Legal Issues

  1. 1 Whether the proposed merger would substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the merger would have a negative impact on public interest, specifically employment and spread of ownership.
  3. 3 Whether the conditions attached to the merger adequately address public interest concerns.

Ratio Decidendi

The Tribunal found that the proposed merger would not result in any horizontal or vertical overlap, as Bidco and its shareholders do not compete with Comair or participate in the same supply chain. Therefore, the transaction would not substantially prevent or lessen competition in any relevant market. The Tribunal further held that the public interest concerns regarding employment and ownership spread were adequately addressed by the merger conditions, which capped retrenchments at 200 employees, required offers of employment to retrenched staff, and mandated the implementation of a broad-based black economic empowerment initiative and employee share ownership program. The Tribunal...

Court Disposition

Merger conditionally approved subject to public interest and ownership spread conditions.

Orders

  • The merger is approved subject to the conditions set out in Annexure A, including capping retrenchments at 200 employees and implementing BBBEE and ESOP initiatives.
  • Bidco must make offers of employment to all staff retrenched as a result of the transaction when jobs become available.