Media24 (Pty) Ltd v Novus Holdings Limited (LM012Apr16) [2017] ZACT 52 (22 August 2017)

Media24 (Pty) Ltd v Novus Holdings Limited (LM012Apr16) [2017] ZACT 52 (22 August 2017)

The Tribunal found that the divestment condition, which reduces Media24's shareholding in Novus to 19%, together with the termination of the Restated Management Agreement and the print contract condition, effectively results in Media24 relinquishing both de jure and de facto control over Novus. The Tribunal considered potential competition concerns, including input foreclosure and information exchange, and concluded that the proposed conditions adequately mitigate these risks. The Tribunal also assessed public interest concerns, particularly the impact on small businesses and historically disadvantaged persons, and found that these concerns were addressed by the conditions. The merger was...

Citation
[2017] ZACT 52
Parties
Applicant: Media24 (Pty) Ltd; Respondent: Novus Holdings Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
22 August 2017
Case Number
LM012Apr16
Procedural Posture
Large Merger Review / Reasons for Conditional Approval After Hearing
Outcome
Merger conditionally approved subject to divestiture and other specified conditions.
Judges
Norman Manoim, Andreas Wessels, Mondo Mazwai
Legal Topics
Merger Control, Divestiture Conditions, Input Foreclosure, Information Exchange, Public Interest, Management Agreement Termination
Competition Law Commercial and Corporate Merger Control Divestiture Conditions Input Foreclosure Information Exchange Public Interest Management Agreement Termination

Case Brief

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Parties

Media24 (Pty) Ltd

Applicant

Novus Holdings Limited

Respondent

Procedural Posture

Large Merger Review / Reasons for Conditional Approval After Hearing

Legal Issues

  1. 1 Whether Media24's reduction of its shareholding in Novus to 19% results in relinquishment of control, both de jure and de facto.
  2. 2 Whether the merger raises competition concerns, specifically input foreclosure and information exchange.
  3. 3 Whether the proposed conditions adequately address public interest concerns, including effects on small businesses and historically disadvantaged persons.

Ratio Decidendi

The Tribunal found that the divestment condition, which reduces Media24's shareholding in Novus to 19%, together with the termination of the Restated Management Agreement and the print contract condition, effectively results in Media24 relinquishing both de jure and de facto control over Novus. The Tribunal considered potential competition concerns, including input foreclosure and information exchange, and concluded that the proposed conditions adequately mitigate these risks. The Tribunal also assessed public interest concerns, particularly the impact on small businesses and historically disadvantaged persons, and found that these concerns were addressed by the conditions. The merger was...

Court Disposition

Merger conditionally approved subject to divestiture and other specified conditions.

Orders

  • Media24 must divest its shareholding in Novus to no more than 19% through an unbundling process.
  • The Restated Management Agreement between Media24 and Novus must be terminated.