New Tsogo Sun Holdings (Pty) Ltd and Southern Sun Holdings Ltd/Tsogo Sun Holdings (Pty) Ltd (96/LM/DEC02) [2003] ZACT 14 (14 March 2003)

New Tsogo Sun Holdings (Pty) Ltd and Southern Sun Holdings Ltd/Tsogo Sun Holdings (Pty) Ltd (96/LM/DEC02) [2003] ZACT 14 (14 March 2003)

The Tribunal found that the merger constitutes a restructuring of assets rather than a substantive change in market control. In the gaming market, the assets were previously jointly controlled by the merging parties and will continue to be jointly controlled post-merger, albeit with a reversal in shareholding proportions. The gaming industry is highly regulated, and the transaction does not alter the competitive landscape. In the short-term accommodation market, the merged entity's market shares in various geographic areas do not raise competition concerns, given the presence of numerous competitors, including international hotel chains and many bed and breakfast establishments. Barriers...

Citation
[2003] ZACT 14
Parties
Applicant: New Tsogo Sun Holdings (Pty) Ltd; Respondent: Southern Sun Holdings Ltd/Tsogo Sun Holdings (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
14 March 2003
Case Number
96/LM/Dec02
Procedural Posture
Large Merger / Merger Approval
Outcome
Merger approved without conditions.
Judges
N. Manoim, D. Lewis, F. Fourie
Legal Topics
Large Merger Review, Market Definition, Public Interest, Hotel and Gaming Industry, Barriers to Entry
Competition Law Commercial and Corporate Large Merger Review Market Definition Public Interest Hotel and Gaming Industry Barriers to Entry

Case Brief

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Parties

New Tsogo Sun Holdings (Pty) Ltd

Applicant

Southern Sun Holdings Ltd/Tsogo Sun Holdings (Pty) Ltd

Respondent

Procedural Posture

Large Merger / Merger Approval

Legal Issues

  1. 1 Whether the proposed merger will substantially prevent or lessen competition in the gaming market.
  2. 2 Whether the proposed merger will substantially prevent or lessen competition in the short-term accommodation market.
  3. 3 Whether the transaction raises any public interest concerns.

Ratio Decidendi

The Tribunal found that the merger constitutes a restructuring of assets rather than a substantive change in market control. In the gaming market, the assets were previously jointly controlled by the merging parties and will continue to be jointly controlled post-merger, albeit with a reversal in shareholding proportions. The gaming industry is highly regulated, and the transaction does not alter the competitive landscape. In the short-term accommodation market, the merged entity's market shares in various geographic areas do not raise competition concerns, given the presence of numerous competitors, including international hotel chains and many bed and breakfast establishments. Barriers...

Court Disposition

Merger approved without conditions.

Orders

  • The merger is approved unconditionally.
  • A Merger Clearance Certificate is issued to the parties.