Merafe Ferrochrome and Mining (Pty) Ltd / Xstrata South Africa (Pty) Ltd and Xstrata (Samancor Production Joint Venture) / Samancor Ltd (56/LM/Jun05) [2006] ZACT 9 (13 February 2006)

Merafe Ferrochrome and Mining (Pty) Ltd / Xstrata South Africa (Pty) Ltd and Xstrata (Samancor Production Joint Venture) / Samancor Ltd (56/LM/Jun05) [2006] ZACT 9 (13 February 2006)

The Tribunal found that the transaction would result in only minor increases in market share in both the national chrome ore market and the global ferrochrome market, with accretions of approximately 1%. The vertical effects were also considered insignificant due to the presence of alternative suppliers and the existence of supply conditions imposed in previous transactions. The Tribunal concluded that the merger would not substantially prevent or lessen competition in any relevant market and that there were no public interest issues that would alter this conclusion. Accordingly, the merger was approved without conditions.

Citation
[2006] ZACT 9
Parties
Applicant: Merafe Ferrochrome and Mining (Pty) Ltd; Applicant: Xstrata South Africa (Pty) Ltd; Respondent: Samancor Ltd; Respondent: Competition Commission
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
13 February 2006
Case Number
56/LM/Jun05
Procedural Posture
Large Merger / Merger Clearance Decision
Outcome
Merger approved without conditions.
Judges
Y Carrim, N Manoim, L Reyburn
Legal Topics
Large Merger Review, Horizontal Effects, Vertical Effects, Market Share Accretion, Public Interest, Supply Conditions
Competition Law Commercial and Corporate Large Merger Review Horizontal Effects Vertical Effects Market Share Accretion Public Interest Supply Conditions

Case Brief

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Parties

Merafe Ferrochrome and Mining (Pty) Ltd

Applicant

Xstrata South Africa (Pty) Ltd

Applicant

Samancor Ltd

Respondent

Competition Commission

Respondent

Procedural Posture

Large Merger / Merger Clearance Decision

Legal Issues

  1. 1 Whether the proposed merger would substantially prevent or lessen competition in the relevant markets.
  2. 2 Whether the transaction raises any public interest concerns warranting prohibition or conditions.

Ratio Decidendi

The Tribunal found that the transaction would result in only minor increases in market share in both the national chrome ore market and the global ferrochrome market, with accretions of approximately 1%. The vertical effects were also considered insignificant due to the presence of alternative suppliers and the existence of supply conditions imposed in previous transactions. The Tribunal concluded that the merger would not substantially prevent or lessen competition in any relevant market and that there were no public interest issues that would alter this conclusion. Accordingly, the merger was approved without conditions.

Court Disposition

Merger approved without conditions.

Orders

  • The transaction between Merafe Ferrochrome and Mining (Pty) Ltd, Xstrata South Africa (Pty) Ltd, the Xstrata-Samancor Production Joint Venture, and Samancor Ltd is approved.
  • No conditions are imposed on the approval.