Motus Corporation (Pty) Ltd v Renault South Africa (Pty) Ltd (LM188Jan21) [2021] ZACT 37 (28 April 2021)
- Citation
- [2021] ZACT 37
- Status
- Order
- Jurisdiction
- South Africa
- Court
- Competition Tribunal
- Panel
- M Mazwai, E Daniels, AW Wessels
- Case number
- LM188Jan21
More details
- Court
- Competition Tribunal
- Panel
- M Mazwai, E Daniels, AW Wessels
- Case number
- LM188Jan21
On this page
Professional case brief
Research organized from the available case record
01
Holding and result
The Tribunal found that the transaction involves Motus acquiring the remaining shares in Renault SA, resulting in sole control. The Commission identified horizontal overlaps in the import and distribution of new passenger vehicles and regional retail markets, but concluded that the change from joint to sole control would not alter market structure or competitive dynamics. Vertical overlaps were also considered, but Motus has been the exclusive distributor since 1997, and no third-party distributors or independent dealerships would be foreclosed. No third parties raised concerns, and no public interest issues were identified. The Tribunal concluded that the merger is unlikely to substantially prevent or lessen competition or negatively affect public interest, and approved the transaction unconditionally.
Court disposition
Merger unconditionally approved.
Orders
- The large merger between Motus Corporation (Pty) Ltd and Renault South Africa (Pty) Ltd is approved without conditions.
02
Material facts
Parties
Motus Corporation (Pty) Ltd
Applicant Counsel: Z Banchetti and A RuderRenault South Africa (Pty) Ltd
RespondentAmounts and remedies
- Percentage of Shares Acquired by Motus: 40
- Motus Post Merger Shareholding in Renault SA: 100
03
Procedural history
Posture
Merger Approval / Final Determination
04
Questions and positions
Legal issues
- 01
Whether the proposed merger would substantially prevent or lessen competition in any relevant market.
- 02
Whether the transaction raises any public interest concerns.
- 03
Whether the transaction creates horizontal or vertical overlaps that may affect market structure.
Party arguments
- Applicant
- Motus and Renault SA submitted that the transaction would not alter the competitive dynamics of the relevant markets, as Motus already holds indirect control and the change is from joint to sole control. They argued that there are no third-party distributors affected and no incentive for foreclosure, and that the merger would not negatively impact public interest.
- Respondent
- The Competition Commission argued that the transaction is unlikely to change the market structure due to the nature of the control shift, that competition from other dealerships remains robust, and that neither input nor customer foreclosure is likely. No third parties raised concerns, and no public interest issues were identified.
05
Court’s reasoning
Legal principles
- 01
Competition Act 89 of 1998, section 12A
A merger may only be prohibited if it is likely to substantially prevent or lessen competition in any relevant market.
- 02
Competition Act 89 of 1998, section 12A(3)
The assessment of public interest factors is required in all merger proceedings.
06
Ratio, limits and disposition
Ratio decidendi
The Tribunal found that the transaction involves Motus acquiring the remaining shares in Renault SA, resulting in sole control. The Commission identified horizontal overlaps in the import and distribution of new passenger vehicles and regional retail markets, but concluded that the change from joint to sole control would not alter market structure or competitive dynamics. Vertical overlaps were also considered, but Motus has been the exclusive distributor since 1997, and no third-party distributors or independent dealerships would be foreclosed. No third parties raised concerns, and no public interest issues were identified. The Tribunal concluded that the merger is unlikely to substantially prevent or lessen competition or negatively affect public interest, and approved the transaction unconditionally.
Obiter and limits
- The Tribunal noted that Motus has been the exclusive distributor of Renault vehicles in South Africa since 1997, which mitigates any vertical foreclosure concerns.
- No third parties raised objections to the merger, indicating market participants do not perceive any competitive harm.
Court disposition
Merger unconditionally approved.
- The large merger between Motus Corporation (Pty) Ltd and Renault South Africa (Pty) Ltd is approved without conditions.
Source and reliance status
Competition Tribunal
This page organises the available record for research. Confirm quotations, current status, and subsequent treatment against the official source before relying on the case.
Judgment reading view
Judgment text
The complete available source text.
Competition Tribunal
Order
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case No.: LM188Jan21
In the matter between:
Motus Corporation (Pty) Ltd
Primary Acquiring Firms
and
Renault South Africa (Pty) Ltd
Primary Target Firms
Panel:
M Mazwai (Presiding Member)
E Daniels (Tribunal Panel Member)
AW Wessels (Tribunal Panel Member)
Heard on:
21 April 2021
Order Issued on: 21 April 2021
Reasons Issued on: 28 April 2021
REASONS
FOR DECISION
[1] On 21 April 2021, the Competition Tribunal unconditionally approved a large merger between Motus Corporation (Pty) Ltd (âMotusâ) and Renault South Africa (Pty) Ltd (âRenault SAâ).
[2] The transaction involves Motus acquiring 40% of the shares in Renault SA from Renault S.A.S. Post merger, Motus will directly and indirectly hold 100% shares in Renault SA and therefore, wholly own and control Renault SA.[1]
[3] Motus is controlled by JSE-listed company, Motus Holdings Limited (âMotus Holdingsâ). Motus Holdings and its subsidiaries are active in the import and distribution of motor vehicles; retail and rental of motor vehicles; motor-related financial services; and the provision of aftermarkets parts.
[4] Renault SA is active in the import and distribution of new and used Renault vehicles through its dealer network; the provision of after-sales services to the dealer network; and operates five (5) corporate-owned dealerships.
[5] The Commission identified horizontal overlaps between the activities of the merging parties in the market for the import and distribution of new passenger vehicles nationally and in the regional market for the retail of new passenger vehicles within the Bryanston, East Rand, Fourways, Northcliff, and Edenvale areas where the Renault dealerships are located. However, given that the transaction only results in a change from joint to sole control, the Commission concluded that the transaction is unlikely to change the structure of the market.
[6] The merger parties will continue to face competition from other dealerships.[2]
[7] A vertical overlap was identified as Renault is active in the upstream market for the importation and distribution of the vehicles, while Motus is active in the retail of Renault vehicles. Motus is and has been the exclusive and sole distributor of Renault branded vehicles within South Africa since 1997. For this reason, there are no third-party distributors that are likely to be affected by the transaction and as such, input foreclosure is unlikely. There are also no customer foreclosure concerns as Motus is unlikely to have any incentive to foreclose other third-party independent dealerships.
[8] No third parties raised concerns regarding the effects of the transaction on competition.
[9] The transaction also did not raise any public interest concerns.
[10] Accordingly, we concluded that the transaction is unlikely to substantially prevent or lessen competition in any relevant market, or to have a negative impact on the public interest.
28 April
Ms Mondo Mazwai
Date
Mr Enver Daniels and Mr Andreas Wessels concurring
Tribunal Case Manager: Duduetsang Mogapi
For the Merging Parties: Z Banchetti and A Ruder of Tugendhaft Wapnick Banchetti and Partners
For the Commission: R Molotsi and G Mutizwa
[1] Motus indirectly holds 60% of the shares in Renault SA, through its subsidiary Motus Car Imports Proprietary Limited.
[2] Volkswagen South Africa, Toyota, Nissan, Ford, and others.
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