Kenilworth Racing Pty (Ltd) v Gold Circle Pty (Ltd); Thoroughbred Horseracing Trust v Kenilworth Racing Pty (Ltd) (36/AM/Apr12) [2013] ZACT 6; [2013] 1 CPLR 117 (CT) (7 February 2013)

Kenilworth Racing Pty (Ltd) v Gold Circle Pty (Ltd); Thoroughbred Horseracing Trust v Kenilworth Racing Pty (Ltd) (36/AM/Apr12) [2013] ZACT 6; [2013] 1 CPLR 117 (CT) (7 February 2013)

The Tribunal assumed, for purposes of substantive analysis, that Phumelela would acquire control over Kenilworth Racing post-merger. It found that the relevant markets—horse racing operations, betting, and broadcasting—are structured as regional monopolies due to regulatory policy and geographic realities, with little prospect of new entry or increased concentration. The merger would not result in a substantial lessening or prevention of competition in any market, as price regulation, consumer preferences for commingling, and the structure of industry agreements mitigate potential harm. The failing firm defence was not decisive, as there was insufficient evidence of inevitable market...

Citation
[2013] ZACT 6
Parties
Applicant: Kenilworth Racing Pty (Ltd); Respondent: Gold Circle Pty (Ltd); Applicant: Thoroughbred Horseracing Trust
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
7 February 2013
Case Number
36/AM/Apr12
Procedural Posture
Merger Application / Reasons for Decision After Approval With Conditions
Outcome
Merger approved subject to conditions.
Judges
Norman Manoim, Yasmin Carrim, Merle Holden
Legal Topics
Merger Control, Failing Firm Defence, Market Definition, Foreclosure, Public Interest, Stakeholder Consultation
Competition Law Commercial and Corporate Merger Control Failing Firm Defence Market Definition Foreclosure Public Interest Stakeholder Consultation

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Parties

Kenilworth Racing Pty (Ltd)

Applicant

Gold Circle Pty (Ltd)

Respondent

Thoroughbred Horseracing Trust

Applicant

Procedural Posture

Merger Application / Reasons for Decision After Approval With Conditions

Legal Issues

  1. 1 Whether the merger will result in Phumelela acquiring control over Kenilworth Racing and the Western Cape horse racing assets.
  2. 2 Whether the merger will substantially lessen or prevent competition in the relevant markets.
  3. 3 Whether the merger can be justified on public interest grounds, particularly regarding employment and black economic empowerment.

Ratio Decidendi

The Tribunal assumed, for purposes of substantive analysis, that Phumelela would acquire control over Kenilworth Racing post-merger. It found that the relevant markets—horse racing operations, betting, and broadcasting—are structured as regional monopolies due to regulatory policy and geographic realities, with little prospect of new entry or increased concentration. The merger would not result in a substantial lessening or prevention of competition in any market, as price regulation, consumer preferences for commingling, and the structure of industry agreements mitigate potential harm. The failing firm defence was not decisive, as there was insufficient evidence of inevitable market...

Court Disposition

Merger approved subject to conditions.

Orders

  • The merger is approved subject to the condition that no merger-specific retrenchments may occur for a period of two years from the date of implementation.
  • The condition regarding retrenchments is attached as Annexure A to the reasons for decision.