Man AG v Volkswagen Caminhoes E Onibus Industrai (17/LM/Feb09) [2009] ZACT 37 (2 June 2009)

Man AG v Volkswagen Caminhoes E Onibus Industrai (17/LM/Feb09) [2009] ZACT 37 (2 June 2009)

The Tribunal found that the proposed acquisition would not substantially prevent or lessen competition in any relevant market. In the heavy commercial vehicle market, the merged entity's market share would be only 3%, and in the extra heavy commercial vehicle market, 14%, with a negligible increase in market concentration. In the bus chassis market, although the merged entity would have a 45% share, MAN AG and VWCO are not close competitors, as their products serve different market segments and customer needs. The Commission's investigation confirmed that customers do not view VWCO as a substitute for MAN AG, and barriers to entry, while present, have not prevented new entrants. No...

Citation
[2009] ZACT 37
Parties
Applicant: MAN AG; Respondent: Volkswagen Caminhoes E Onibus Industrai; Respondent: Cormecio DE Veiculo Comercias LTDA
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
2 June 2009
Case Number
17/LM/Feb09
Procedural Posture
Merger Review / Reasons for Decision
Outcome
The merger is approved without conditions.
Judges
D Lewis, N Manoim, Y Carrim
Legal Topics
Merger Control, Market Definition, Horizontal Overlap, Barriers to Entry
Competition Law Commercial and Corporate Merger Control Market Definition Horizontal Overlap Barriers to Entry

Case Brief

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Parties

MAN AG

Applicant

Volkswagen Caminhoes E Onibus Industrai

Respondent

Cormecio DE Veiculo Comercias LTDA

Respondent

Procedural Posture

Merger Review / Reasons for Decision

Legal Issues

  1. 1 Whether the proposed acquisition of VWCO by MAN AG will substantially prevent or lessen competition in the relevant South African markets.
  2. 2 Whether the merging parties are close competitors in the supply of heavy trucks, extra heavy trucks, and bus chassis.
  3. 3 Whether the transaction raises any significant public interest concerns.

Ratio Decidendi

The Tribunal found that the proposed acquisition would not substantially prevent or lessen competition in any relevant market. In the heavy commercial vehicle market, the merged entity's market share would be only 3%, and in the extra heavy commercial vehicle market, 14%, with a negligible increase in market concentration. In the bus chassis market, although the merged entity would have a 45% share, MAN AG and VWCO are not close competitors, as their products serve different market segments and customer needs. The Commission's investigation confirmed that customers do not view VWCO as a substitute for MAN AG, and barriers to entry, while present, have not prevented new entrants. No...

Court Disposition

The merger is approved without conditions.

Orders

  • The acquisition of indirect control of Volkswagen Caminhoes E Onibus Industrai by MAN AG is approved.
  • No conditions are attached to the approval.