Louis Dreyfus Commodities Africa (Pty) Ltd and Another v Best Milling (Pty) Ltd and Others (LM050Jun15) [2015] ZACT 88; [2015] 2 CPLR 653 (CT) (30 July 2015)

Parties

Procedural Posture

Merger Application / Reasons for Decision

Legal Issues

1. 1 Does the proposed merger substantially prevent or lessen competition in the relevant markets?
2. 2 Are there horizontal or vertical foreclosure concerns arising from the merger?
3. 3 Does joint control by competitors create a risk of coordinated effects in the wheat trading market?

Ratio Decidendi

The Tribunal found that the merger would not substantially prevent or lessen competition in the relevant markets. The target firm's grain storage capacity is not part of the competitive market for third-party storage, and the merger does not increase concentration. Vertical relationships between the acquiring firms and the target firm do not raise foreclosure concerns due to the presence of alternative suppliers and buyers. Although there is a history of prohibited coordination, market changes, increased competition, and low market shares mitigate the risk of future coordinated effects. The Tribunal accepted the Commission's recommendation to approve the merger subject to conditions...

Court Disposition

Merger conditionally approved subject to employment-related conditions.

Orders

• The merger is approved subject to the condition that no more than 61 employees at the target firm may be retrenched as a result of the merger.
• VKB must give first preference to affected employees for vacancies arising within 12 months post-merger.