Lewis Stores (Pty) Ltd v United Office Furniture Outlets (Pty) Ltd (LM226Nov17) [2018] ZACT 9 (13 February 2018)

Lewis Stores (Pty) Ltd v United Office Furniture Outlets (Pty) Ltd (LM226Nov17) [2018] ZACT 9 (13 February 2018)

The Tribunal found that the merger would not substantially prevent or lessen competition in the national or regional markets for the retail of furniture, as the post-merger entity would hold approximately 15% market share and sufficient competitors remained. The retrenchments undertaken by Lewis prior to the merger were not merger specific, as they were initiated before the merger was contemplated and were motivated by independent business factors such as unfavorable trading conditions and regulatory changes. The Tribunal accepted the merging parties' undertaking to operate UFO as a separate business and retain its staff. To address public interest concerns regarding potential future job...

Citation
[2018] ZACT 9
Parties
Applicant: Lewis Stores (Pty) Ltd; Respondent: United Office Furniture Outlets (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
13 February 2018
Case Number
LM226Nov17
Procedural Posture
Large Merger Application / Approval With Conditions
Outcome
Merger approved subject to conditions.
Judges
N Manoim, M Mokuena, AW Wessels
Legal Topics
Merger Control, Public Interest Conditions, Employment Protection
Competition Law Commercial and Corporate Merger Control Public Interest Conditions Employment Protection

Case Brief

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Parties

Lewis Stores (Pty) Ltd

Applicant

United Office Furniture Outlets (Pty) Ltd

Respondent

Procedural Posture

Large Merger Application / Approval With Conditions

Legal Issues

  1. 1 Whether the proposed merger would substantially prevent or lessen competition in any relevant market.
  2. 2 Whether retrenchments undertaken by the acquiring firm prior to the merger were merger specific.
  3. 3 Whether the merger raises public interest concerns, particularly regarding employment.

Ratio Decidendi

The Tribunal found that the merger would not substantially prevent or lessen competition in the national or regional markets for the retail of furniture, as the post-merger entity would hold approximately 15% market share and sufficient competitors remained. The retrenchments undertaken by Lewis prior to the merger were not merger specific, as they were initiated before the merger was contemplated and were motivated by independent business factors such as unfavorable trading conditions and regulatory changes. The Tribunal accepted the merging parties' undertaking to operate UFO as a separate business and retain its staff. To address public interest concerns regarding potential future job...

Court Disposition

Merger approved subject to conditions.

Orders

  • The large merger between Lewis Stores (Pty) Ltd and United Office Furniture Outlets (Pty) Ltd is approved.
  • A moratorium is imposed on merger-specific job retrenchments for a period of two years from the implementation date of the transaction.