Naledi Forging (Pty) Ltd v DCD Ringrollers, a division of DCD Group (Pty) Ltd (LM003Apr18) [2018] ZACT 70 (20 June 2018)

Naledi Forging (Pty) Ltd v DCD Ringrollers, a division of DCD Group (Pty) Ltd (LM003Apr18) [2018] ZACT 70 (20 June 2018)

The Tribunal found that there was no overlap in the activities of the merging parties, as Naledi imports forged wheels for heavy haul applications and DCD Ringrollers manufactures metal tyres for light rail applications. The products are not reasonable substitutes from either a demand or supply perspective, and the market structure would not be altered by the transaction. Concerns raised by CPSA regarding localisation were dismissed, as DCD Ringrollers does not supply forged wheels and the transaction would not assist Naledi in meeting localisation requirements. Employment concerns raised by NUMSA were addressed by the merging parties, who confirmed that employees could obtain copies of...

Citation
[2018] ZACT 70
Parties
Applicant: Naledi Forging (Pty) Ltd; Respondent: DCD Ringrollers, a division of DCD Group (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
20 June 2018
Case Number
LM003Apr18
Procedural Posture
Merger Application / Approval and Reasons
Outcome
The proposed transaction is approved unconditionally.
Judges
Andiswa Ndoni, lmraan Valodia, Medi Mokuena
Legal Topics
Merger Review, Public Interest, Market Definition, Localisation Requirement
Competition Law Merger Review Public Interest Market Definition Localisation Requirement

Case Brief

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Parties

Naledi Forging (Pty) Ltd

Applicant

DCD Ringrollers, a division of DCD Group (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Approval and Reasons

Legal Issues

  1. 1 Whether the proposed merger would substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the transaction would circumvent localisation requirements imposed by Transnet.
  3. 3 Whether the merger would have adverse effects on employment or public interest concerns.

Ratio Decidendi

The Tribunal found that there was no overlap in the activities of the merging parties, as Naledi imports forged wheels for heavy haul applications and DCD Ringrollers manufactures metal tyres for light rail applications. The products are not reasonable substitutes from either a demand or supply perspective, and the market structure would not be altered by the transaction. Concerns raised by CPSA regarding localisation were dismissed, as DCD Ringrollers does not supply forged wheels and the transaction would not assist Naledi in meeting localisation requirements. Employment concerns raised by NUMSA were addressed by the merging parties, who confirmed that employees could obtain copies of...

Court Disposition

The proposed transaction is approved unconditionally.

Orders

  • The merger between Naledi Forging (Pty) Ltd and DCD Ringrollers, a division of DCD Group (Pty) Ltd, is approved without conditions.