Murray & Roberts Limited and Concor Limited (101/LM/Oct05) [2006] ZACT 81; [2006] 2 CPLR 622 (CT) (11 October 2006)

Murray & Roberts Limited and Concor Limited (101/LM/Oct05) [2006] ZACT 81; [2006] 2 CPLR 622 (CT) (11 October 2006)

The Tribunal found that the relevant market for competition analysis is the provision of toll road operations, without further segmentation into privately-sponsored and government-sponsored sub-markets. While post-merger market shares and HHI figures are high, the market operates through infrequent, large-scale tenders in a bidding market environment, which limits the ability of any supplier to exercise market power. SANRAL, as both regulator and customer, possesses significant countervailing power, determining technical specifications, contract terms, and the size of the market. Although barriers to entry are high due to technical and regulatory requirements, the presence of credible...

Citation
[2006] ZACT 81
Parties
Applicant: Murray & Roberts Limited; Respondent: Concor Limited; Respondent: South African National Roads Agency Limited (SANRAL); Respondent: Competition Commission
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
11 October 2006
Case Number
101/LM/Oct05
Procedural Posture
Large Merger / Merger Clearance and Reasons for Decision
Outcome
Merger approved unconditionally; no substantial prevention or lessening of competition found.
Judges
D Lewis, Y Carrim, N Manoim
Legal Topics
Large Merger Review, Market Definition, Barriers to Entry, Bidding Markets, Countervailing Power, Horizontal and Vertical Overlap
Competition Law Commercial and Corporate Large Merger Review Market Definition Barriers to Entry Bidding Markets Countervailing Power Horizontal and Vertical Overlap

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Parties

Murray & Roberts Limited

Applicant

Concor Limited

Respondent

South African National Roads Agency Limited (SANRAL)

Respondent

Competition Commission

Respondent

Procedural Posture

Large Merger / Merger Clearance and Reasons for Decision

Legal Issues

  1. 1 Does the proposed merger between Murray & Roberts Limited and Concor Limited substantially prevent or lessen competition in any relevant market?
  2. 2 Is the market for toll road operations appropriately defined for competition analysis?
  3. 3 Are barriers to entry in the toll road operations market sufficiently high to raise competition concerns?

Ratio Decidendi

The Tribunal found that the relevant market for competition analysis is the provision of toll road operations, without further segmentation into privately-sponsored and government-sponsored sub-markets. While post-merger market shares and HHI figures are high, the market operates through infrequent, large-scale tenders in a bidding market environment, which limits the ability of any supplier to exercise market power. SANRAL, as both regulator and customer, possesses significant countervailing power, determining technical specifications, contract terms, and the size of the market. Although barriers to entry are high due to technical and regulatory requirements, the presence of credible...

Court Disposition

Merger approved unconditionally; no substantial prevention or lessening of competition found.

Orders

  • The merger between Murray & Roberts Limited and Concor Limited is approved without conditions.
  • No public interest issues arise from the transaction.