Lafarge South Africa (Pty) Ltd v Ash Resources (Pty) Ltd (109/LM/Oct08) [2009] ZACT 47; [2009] 2 CPLR 436 (CT) (17 July 2009)

Lafarge South Africa (Pty) Ltd v Ash Resources (Pty) Ltd (109/LM/Oct08) [2009] ZACT 47; [2009] 2 CPLR 436 (CT) (17 July 2009)

The Tribunal found that the transaction would result in Lafarge acquiring full ownership of Ash Resources, but this did not alter the competitive dynamics in the relevant markets. Lafarge already sourced its fly ash requirements from Ash Resources, and the merger did not change pre-existing supply relationships. The Commission's market definitions were accepted for the purposes of analysis. Although Lafarge could theoretically foreclose competitors in the ready-mix market, there was no incentive to do so, as Lafarge's usage of Ash Resources' capacity was limited and new entrants were increasing competition. The Tribunal also noted the absence of public interest concerns. Accordingly, the...

Citation
[2009] ZACT 47
Parties
Applicant: Lafarge South Africa (Pty) Ltd; Respondent: Ash Resources (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
17 July 2009
Case Number
109/LM/Oct08
Procedural Posture
Merger Application / Reasons for Decision
Outcome
Merger approved unconditionally.
Judges
D Lewis, N Manoim, U Bhoola
Legal Topics
Merger Control, Vertical Integration, Market Definition, Input Foreclosure, Public Interest
Competition Law Commercial and Corporate Merger Control Vertical Integration Market Definition Input Foreclosure Public Interest

Case Brief

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Parties

Lafarge South Africa (Pty) Ltd

Applicant

Ash Resources (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Reasons for Decision

Legal Issues

  1. 1 Whether the proposed acquisition of the remaining 25% shareholding in Ash Resources by Lafarge raises competition concerns in the relevant markets.
  2. 2 Whether the transaction results in input or customer foreclosure in the markets for fly ash, blended cement, and ready-mix concrete.
  3. 3 Whether there are any public interest issues arising from the merger.

Ratio Decidendi

The Tribunal found that the transaction would result in Lafarge acquiring full ownership of Ash Resources, but this did not alter the competitive dynamics in the relevant markets. Lafarge already sourced its fly ash requirements from Ash Resources, and the merger did not change pre-existing supply relationships. The Commission's market definitions were accepted for the purposes of analysis. Although Lafarge could theoretically foreclose competitors in the ready-mix market, there was no incentive to do so, as Lafarge's usage of Ash Resources' capacity was limited and new entrants were increasing competition. The Tribunal also noted the absence of public interest concerns. Accordingly, the...

Court Disposition

Merger approved unconditionally.

Orders

  • The merger between Lafarge South Africa (Pty) Ltd and Ash Resources (Pty) Ltd is approved without conditions.