Nestle SA v R and R Ice Cream Public Limited Company (LM026MAY16) [2016] ZACT 63 (12 August 2016)

Nestle SA v R and R Ice Cream Public Limited Company (LM026MAY16) [2016] ZACT 63 (12 August 2016)

The Tribunal found that the proposed merger resulted in a horizontal overlap in the manufacture and supply of ice cream, but no geographic overlap existed as Nestle South Africa was not active in the relevant market. The non-compete obligation between Nestle and Fund V was limited to activities competing with the joint venture and was restricted to a certain period, rendering it reasonable and commercially justifiable. The Tribunal concurred with the Commission that the transaction was unlikely to substantially prevent or lessen competition in any relevant market. No negative effect on employment was anticipated, and no other public interest concerns were raised. Accordingly, the Tribunal...

Citation
[2016] ZACT 63
Parties
Applicant: Nestle S.A.; Respondent: R&R Ice Cream Public Limited Company
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
12 August 2016
Case Number
LM026May16
Procedural Posture
Large Merger / Approval
Outcome
Merger approved unconditionally.
Judges
Norman Manoim, Medi Mokuena, Andiswa Ndoni
Legal Topics
Horizontal Merger, Non Compete Obligation, Public Interest, Market Overlap, Employment Effects
Competition Law Commercial and Corporate Horizontal Merger Non Compete Obligation Public Interest Market Overlap Employment Effects

Case Brief

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Parties

Nestle S.A.

Applicant

R&R Ice Cream Public Limited Company

Respondent

Procedural Posture

Large Merger / Approval

Legal Issues

  1. 1 Whether the proposed merger between Nestle S.A. and R&R Ice Cream Public Limited Company is likely to substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the non-compete obligation agreed between Nestle and Fund V is reasonable and commercially justifiable.
  3. 3 Whether the proposed transaction raises any public interest concerns, particularly regarding employment.

Ratio Decidendi

The Tribunal found that the proposed merger resulted in a horizontal overlap in the manufacture and supply of ice cream, but no geographic overlap existed as Nestle South Africa was not active in the relevant market. The non-compete obligation between Nestle and Fund V was limited to activities competing with the joint venture and was restricted to a certain period, rendering it reasonable and commercially justifiable. The Tribunal concurred with the Commission that the transaction was unlikely to substantially prevent or lessen competition in any relevant market. No negative effect on employment was anticipated, and no other public interest concerns were raised. Accordingly, the Tribunal...

Court Disposition

Merger approved unconditionally.

Orders

  • The large merger between Nestle S.A. and R&R Ice Cream Public Limited Company is approved without conditions.