Kap Diversified Industrial (Pty) Ltd v Safripol Holdings (Pty) Ltd (LM098Sep16) [2017] ZACT 6; [2017] 1 CPLR 345 (CT) (26 January 2017)

Kap Diversified Industrial (Pty) Ltd v Safripol Holdings (Pty) Ltd (LM098Sep16) [2017] ZACT 6; [2017] 1 CPLR 345 (CT) (26 January 2017)

The Tribunal found that there is no horizontal overlap between the activities of the merging parties, and thus no accretion in market shares. Concerns about post-merger unilateral price increases and input foreclosure were investigated, but the evidence showed that HOPE imports are readily available and competitive, and the Rare Group is an insignificant customer. The Tribunal concluded that the proposed transaction is unlikely to result in any appreciable foreclosure concerns or substantially lessen competition. No public interest issues, including employment effects, were identified. The merger was approved unconditionally, without the supply condition proposed by the Commission.

Citation
[2017] ZACT 6
Parties
Applicant: KAP Diversified Industrial (Pty) Ltd; Respondent: Safripol Holdings (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
26 January 2017
Case Number
LM098Sep16
Procedural Posture
Merger Control / Approval of Proposed Merger
Outcome
The proposed merger is approved unconditionally.
Judges
Norman Manoim, Medi Mokuena, AW Wessels
Legal Topics
Merger Control, Input Foreclosure, Public Interest, Horizontal Overlap, Supply Conditions
Competition Law Merger Control Input Foreclosure Public Interest Horizontal Overlap Supply Conditions

Case Brief

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Parties

KAP Diversified Industrial (Pty) Ltd

Applicant

Safripol Holdings (Pty) Ltd

Respondent

Procedural Posture

Merger Control / Approval of Proposed 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 result in input foreclosure affecting customers of HOPE.
  3. 3 Whether any public interest concerns arise from the transaction.

Ratio Decidendi

The Tribunal found that there is no horizontal overlap between the activities of the merging parties, and thus no accretion in market shares. Concerns about post-merger unilateral price increases and input foreclosure were investigated, but the evidence showed that HOPE imports are readily available and competitive, and the Rare Group is an insignificant customer. The Tribunal concluded that the proposed transaction is unlikely to result in any appreciable foreclosure concerns or substantially lessen competition. No public interest issues, including employment effects, were identified. The merger was approved unconditionally, without the supply condition proposed by the Commission.

Court Disposition

The proposed merger is approved unconditionally.

Orders

  • The proposed transaction is approved without conditions.