Lafarge Roofing (Pty) Ltd and Kulu Concrete Products and Others (63/LM/Jul06) [2007] ZACT 41; [2007] 2 CPLR 314 (CT) (18 June 2007)

Parties

Procedural Posture

Merger Review / Reasons for Decision Following Merger Approval With Conditions

Legal Issues

1. 1 Does the proposed merger substantially prevent or lessen competition in the relevant markets for concrete roof tiles?
2. 2 What is the appropriate product and geographic market definition for assessing the merger?
3. 3 Are there significant barriers to entry or expansion in the affected markets?

Ratio Decidendi

The Tribunal found that the relevant product market is the manufacture and supply of concrete roof tiles, not the broader market for pitched roof coverings. Alternative roofing materials, such as steel, do not exert sufficient competitive discipline on concrete tiles due to significant price differentials, differing customer perceptions, and distinct input cost drivers. The geographic markets were defined as Gauteng, Western Cape, and Greater Durban (KwaZulu-Natal), with the latter refined to a coastal market centered around Durban. In Gauteng, despite high concentration post-merger, entry barriers are low and sufficient competitors remain. In the Western Cape, the merger would create a...

Court Disposition

Merger approved subject to conditions.

Orders

• The merger is approved subject to the conditions contained in the Annexure.
• The merging parties must divest the Kulu Western Cape plant to a viable competitor.