New Holdco v Edgars Consolidated Stores Ltd (LM270Mar19) [2019] ZACT 30 (13 June 2019)

New Holdco v Edgars Consolidated Stores Ltd (LM270Mar19) [2019] ZACT 30 (13 June 2019)

The Tribunal found that the proposed transaction is essentially a financial restructuring aimed at preventing the Edcon group from entering business rescue or liquidation. The transaction does not result in any market overlaps and is unlikely to substantially lessen or prevent competition in the relevant markets for apparel, cosmetics, homeware, and mobile cellular products. The Tribunal agreed with the Competition Commission's assessment that safeguards exist to prevent the exchange of competitively sensitive information among shareholders. The merger does not raise public interest concerns; instead, it safeguards employment, local procurement, and black economic empowerment through...

Citation
[2019] ZACT 30
Parties
Applicant: New Holdco; Respondent: Edgars Consolidated Stores Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
13 June 2019
Case Number
LM270Mar19
Procedural Posture
Merger Application / Conditional Approval
Outcome
Merger conditionally approved subject to public interest conditions.
Judges
E Daniels, M Mazwai
Legal Topics
Merger Control, Public Interest Conditions, Black Economic Empowerment, Local Procurement, Employment Protection
Competition Law Commercial and Corporate Merger Control Public Interest Conditions Black Economic Empowerment Local Procurement Employment Protection

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Parties

New Holdco

Applicant

Edgars Consolidated Stores Ltd

Respondent

Procedural Posture

Merger Application / Conditional Approval

Legal Issues

  1. 1 Whether the proposed merger between New Holdco and Edgars Consolidated Stores Ltd is likely to substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the merger raises public interest concerns, including employment, local procurement, and black economic empowerment.
  3. 3 Whether the conditions imposed adequately safeguard public interest objectives.

Ratio Decidendi

The Tribunal found that the proposed transaction is essentially a financial restructuring aimed at preventing the Edcon group from entering business rescue or liquidation. The transaction does not result in any market overlaps and is unlikely to substantially lessen or prevent competition in the relevant markets for apparel, cosmetics, homeware, and mobile cellular products. The Tribunal agreed with the Competition Commission's assessment that safeguards exist to prevent the exchange of competitively sensitive information among shareholders. The merger does not raise public interest concerns; instead, it safeguards employment, local procurement, and black economic empowerment through...

Court Disposition

Merger conditionally approved subject to public interest conditions.

Orders

  • The merger between New Holdco and Edgars Consolidated Stores Ltd is approved subject to the conditions set out in Annexure A.
  • The conditions replace those imposed in the 2016 restructuring and will run for five years from the approval date.