New Largo Coal (Pty) Ltd New Largo Coal Business of Anglo American Inyosi (Pty) Ltd (LM002Apr18) [2018] ZACT 27 (24 July 2018)

New Largo Coal (Pty) Ltd New Largo Coal Business of Anglo American Inyosi (Pty) Ltd (LM002Apr18) [2018] ZACT 27 (24 July 2018)

The Tribunal found that the proposed transaction would not substantially prevent or lessen competition in any relevant market. The target business is a tied mine developed for exclusive supply to Eskom's Kusile power station, and the merger results in a dilution of market share previously held by AAIC. Concerns regarding information exchange due to cross-directorships were addressed by undertakings from IDC and resignations from relevant boards, and the Tribunal accepted that no material overlap or anti-competitive information sharing would occur. Eskom's significant countervailing power and the fragmented nature of the thermal coal supply market further mitigate any risk of...

Citation
[2018] ZACT 27
Parties
Applicant: New Largo Coal (Pty) Ltd; Respondent: New Largo Coal Business of Anglo American Inyosi (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
24 July 2018
Case Number
LM002Apr18
Procedural Posture
Merger Review / Final Determination
Outcome
The proposed merger is approved unconditionally.
Judges
Norman Manoim, Enver Daniels, Yasmin Carrim
Legal Topics
Merger Control, Information Exchange, Market Concentration, Public Interest, Cross Directorship, Countervailing Power
Competition Law Commercial and Corporate Merger Control Information Exchange Market Concentration Public Interest Cross Directorship Countervailing Power

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Parties

New Largo Coal (Pty) Ltd

Applicant

New Largo Coal Business of Anglo American Inyosi (Pty) Ltd

Respondent

Procedural Posture

Merger Review / Final Determination

Legal Issues

  1. 1 Whether the proposed merger would substantially prevent or lessen competition in the relevant market.
  2. 2 Whether the transaction would facilitate anti-competitive information exchange due to cross-directorships.
  3. 3 Whether the transaction raises any public interest concerns, including employment impacts.

Ratio Decidendi

The Tribunal found that the proposed transaction would not substantially prevent or lessen competition in any relevant market. The target business is a tied mine developed for exclusive supply to Eskom's Kusile power station, and the merger results in a dilution of market share previously held by AAIC. Concerns regarding information exchange due to cross-directorships were addressed by undertakings from IDC and resignations from relevant boards, and the Tribunal accepted that no material overlap or anti-competitive information sharing would occur. Eskom's significant countervailing power and the fragmented nature of the thermal coal supply market further mitigate any risk of...

Court Disposition

The proposed merger is approved unconditionally.

Orders

  • The merger between New Largo Coal (Pty) Ltd and the New Largo Coal Business of Anglo American Inyosi (Pty) Ltd is approved without conditions.
  • No adverse public interest issues arise from the transaction.