Marinvest SRL v Messina and Others (LM122OCT19) [2020] ZACT 89 (24 August 2020)

Marinvest SRL v Messina and Others (LM122OCT19) [2020] ZACT 89 (24 August 2020)

The Tribunal found that the proposed transaction would result in a near monopoly in the relevant market, raising significant competition concerns. However, given the severe financial distress of the target firms and the likelihood of liquidation absent the transaction, the failing firm defence was accepted. The Tribunal determined that behavioural remedies, including ring-fencing conditions and strengthened monitoring, together with public interest conditions to protect employment and small suppliers, were sufficient to mitigate the competition risks. The transaction was conditionally approved, with the Tribunal emphasizing the need for ongoing monitoring and the ability for parties and...

Citation
[2020] ZACT 89
Parties
Applicant: Marinvest S.r.l.; Respondent: Ignazio Messina & C.S.p.A; Respondent: RORO Italia S.r.l.
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
24 August 2020
Case Number
LM122OCT19
Procedural Posture
Merger Control / Conditional Approval After Hearing and Submissions
Outcome
The proposed transaction is conditionally approved subject to behavioural and public interest conditions.
Judges
Yasmin Carrim, Fiona Tregenna, AW Wessels
Legal Topics
Merger Control, Market Concentration, Behavioural Remedies, Public Interest Conditions, Failing Firm Defence
Competition Law Commercial and Corporate Merger Control Market Concentration Behavioural Remedies Public Interest Conditions Failing Firm Defence

Case Brief

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Parties

Marinvest S.r.l.

Applicant

Ignazio Messina & C.S.p.A

Respondent

RORO Italia S.r.l.

Respondent

Procedural Posture

Merger Control / Conditional Approval After Hearing and Submissions

Legal Issues

  1. 1 Whether the proposed acquisition by Marinvest of stakes in IM and SPV would substantially prevent or lessen competition in the market for container liner shipping services to and from South Africa and East Africa.
  2. 2 Whether behavioural remedies and public interest conditions can adequately address competition concerns arising from the transaction.
  3. 3 Whether the failing firm defence applies given the financial distress of the target firms.

Ratio Decidendi

The Tribunal found that the proposed transaction would result in a near monopoly in the relevant market, raising significant competition concerns. However, given the severe financial distress of the target firms and the likelihood of liquidation absent the transaction, the failing firm defence was accepted. The Tribunal determined that behavioural remedies, including ring-fencing conditions and strengthened monitoring, together with public interest conditions to protect employment and small suppliers, were sufficient to mitigate the competition risks. The transaction was conditionally approved, with the Tribunal emphasizing the need for ongoing monitoring and the ability for parties and...

Court Disposition

The proposed transaction is conditionally approved subject to behavioural and public interest conditions.

Orders

  • The merger is approved subject to the ring-fencing behavioural conditions set out in Annexure A.
  • IM South Africa shall not undertake merger-specific retrenchments for three years post-transaction.