KLL Group (Pty) Ltd v Starch, Glucose and Animal Feed Ingredients Business of Tongaat Hulett Ltd (LM173Mar20) [2020] ZACT 10 (15 July 2020)

KLL Group (Pty) Ltd v Starch, Glucose and Animal Feed Ingredients Business of Tongaat Hulett Ltd (LM173Mar20) [2020] ZACT 10 (15 July 2020)

The Tribunal found that the proposed merger does not result in any horizontal or vertical overlap, as the acquiring group does not operate in the same markets as the Target Business. The concerns raised by third-party customers regarding pricing and supply agreements were determined to be pre-existing and not merger-specific. The Commission's investigation revealed that the merged entity would be a monopoly in the relevant markets, but customers possess countervailing power and existing supply terms would remain until renegotiation. The Tribunal agreed with the Commission that the merger is unlikely to substantially prevent or lessen competition and that no public interest concerns arise,...

Citation
[2020] ZACT 10
Parties
Applicant: KLL Group (Pty) Ltd; Respondent: Starch, Glucose and Animal Feed Ingredients Business of Tongaat Hulett Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
15 July 2020
Case Number
LM173Mar20
Procedural Posture
Merger Application / Tribunal Approval and Reasons
Outcome
Merger approved unconditionally.
Judges
E Daniels, Y Carrim, H Cheadle
Legal Topics
Merger Control, Dominance, Public Interest, Countervailing Power
Competition Law Merger Control Dominance Public Interest Countervailing Power

Case Brief

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Parties

KLL Group (Pty) Ltd

Applicant

Starch, Glucose and Animal Feed Ingredients Business of Tongaat Hulett Ltd

Respondent

Procedural Posture

Merger Application / Tribunal Approval and Reasons

Legal Issues

  1. 1 Whether the proposed merger would substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the merger raises any public interest concerns under South African competition law.
  3. 3 Whether the concerns raised by third-party customers are merger-specific and warrant conditions.

Ratio Decidendi

The Tribunal found that the proposed merger does not result in any horizontal or vertical overlap, as the acquiring group does not operate in the same markets as the Target Business. The concerns raised by third-party customers regarding pricing and supply agreements were determined to be pre-existing and not merger-specific. The Commission's investigation revealed that the merged entity would be a monopoly in the relevant markets, but customers possess countervailing power and existing supply terms would remain until renegotiation. The Tribunal agreed with the Commission that the merger is unlikely to substantially prevent or lessen competition and that no public interest concerns arise,...

Court Disposition

Merger approved unconditionally.

Orders

  • The proposed transaction is approved unconditionally.
  • No conditions are imposed on the merger.