Mercanto Investments (Pty) Ltd and Johnnic Holdings Ltd (78/LM/Aug05) [2006] ZACT 2; [2006] 1 CPLR 157 (CT) (17 January 2006)

Mercanto Investments (Pty) Ltd and Johnnic Holdings Ltd (78/LM/Aug05) [2006] ZACT 2; [2006] 1 CPLR 157 (CT) (17 January 2006)

The Tribunal found that the evidence relating to the casino market and the arrangement between HCI and Gold Reef City Casinos was not relevant to the merger proceedings, as any future transaction involving joint control of Tsogo Sun Holdings would require separate notification and assessment. The Tribunal determined that the proposed divestiture of Gallagher Estate Exhibition Centre within 12 months adequately addressed competition concerns in the exhibition market, as the condition preserves the economic and competitive value of the business and ensures independent operation until divestiture. The Tribunal concluded that the merger would not substantially lessen or prevent competition in...

Citation
[2006] ZACT 2
Parties
Applicant: Mercanto Investments (Pty) Ltd; Respondent: Johnnic Holdings Ltd; Applicant: Hosken Consolidated Investments Ltd (HCI)
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
17 January 2006
Case Number
78/LM/Aug05
Procedural Posture
Large Merger / Merger Approval With Conditions
Outcome
Merger conditionally approved subject to divestiture of Gallagher Estate Exhibition and Convention Centre.
Judges
Y Carrim, D Lewis, M Holden
Legal Topics
Large Merger Review, Divestiture Remedy, Horizontal Merger, Conference and Exhibition Market, Casino Market Overlap
Competition Law Commercial and Corporate Large Merger Review Divestiture Remedy Horizontal Merger Conference and Exhibition Market Casino Market Overlap

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Parties

Mercanto Investments (Pty) Ltd

Applicant

Johnnic Holdings Ltd

Respondent

Hosken Consolidated Investments Ltd (HCI)

Applicant

Procedural Posture

Large Merger / Merger Approval With Conditions

Legal Issues

  1. 1 Whether the merger between Mercanto Investments (Pty) Ltd and Johnnic Holdings Ltd would substantially lessen or prevent competition in the relevant markets.
  2. 2 Whether the proposed divestiture of Gallagher Estate Exhibition and Convention Centre adequately addresses competition concerns in the exhibition market.
  3. 3 Whether evidence relating to the casino market and the arrangement between HCI and Gold Reef City Casinos is relevant to the merger proceedings.

Ratio Decidendi

The Tribunal found that the evidence relating to the casino market and the arrangement between HCI and Gold Reef City Casinos was not relevant to the merger proceedings, as any future transaction involving joint control of Tsogo Sun Holdings would require separate notification and assessment. The Tribunal determined that the proposed divestiture of Gallagher Estate Exhibition Centre within 12 months adequately addressed competition concerns in the exhibition market, as the condition preserves the economic and competitive value of the business and ensures independent operation until divestiture. The Tribunal concluded that the merger would not substantially lessen or prevent competition in...

Court Disposition

Merger conditionally approved subject to divestiture of Gallagher Estate Exhibition and Convention Centre.

Orders

  • The merger between Mercanto Investments (Pty) Ltd and Johnnic Holdings Ltd is approved subject to the condition that the merged entity shall, within 12 months of the date of the order, divest the business of the Gallagher Estate Exhibition and Convention Centre as a going concern and/or the entire shareholding of...
  • The merging parties must preserve and maintain the economic and competitive value of the divested business and refrain from any act that adversely impacts the business or alters its commercial strategy during the divestiture period.