Parentco (Pty) Ltd v Edcon Limited (LM117Sep16) [2016] ZACT 109; [2017] 1 CPLR 362 (CT) (7 December 2016)

Parentco (Pty) Ltd v Edcon Limited (LM117Sep16) [2016] ZACT 109; [2017] 1 CPLR 362 (CT) (7 December 2016)

The Tribunal found that the proposed merger between Parentco and Edcon does not result in any competitive overlaps and is unlikely to substantially prevent or lessen competition in the relevant markets for apparel, cosmetics, homeware, and mobile cellular products. The Commission's assessment of potential information exchange among bank shareholders concluded that governance arrangements prevent such risks. Public interest concerns raised by SACCAWU and the Economic Development Department were addressed through undertakings by the merging parties to maintain and increase employment, expand procurement from South African suppliers, and protect BEE interests. The Tribunal concluded that the...

Citation
[2016] ZACT 109
Parties
Applicant: Parentco (Pty) Ltd; Respondent: Edcon Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
7 December 2016
Case Number
LM117Sep16
Procedural Posture
Large Merger Review / Merger Approval With Conditions
Outcome
Merger conditionally approved subject to public interest conditions.
Judges
Norman Manoim, Mondo Mazwai, Medi Mokuena
Legal Topics
Large Merger Review, Public Interest Conditions, Employment Protection, Local Procurement, Black Economic Empowerment
Competition Law Commercial and Corporate Large Merger Review Public Interest Conditions Employment Protection Local Procurement Black Economic Empowerment

Case Brief

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Parties

Parentco (Pty) Ltd

Applicant

Edcon Limited

Respondent

Procedural Posture

Large Merger Review / Merger Approval With Conditions

Legal Issues

  1. 1 Whether the proposed merger between Parentco and Edcon is likely to substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the transaction raises public interest concerns, particularly regarding employment, local procurement, and black economic empowerment.
  3. 3 Whether the merger conditions adequately address concerns raised by stakeholders including trade unions and government departments.

Ratio Decidendi

The Tribunal found that the proposed merger between Parentco and Edcon does not result in any competitive overlaps and is unlikely to substantially prevent or lessen competition in the relevant markets for apparel, cosmetics, homeware, and mobile cellular products. The Commission's assessment of potential information exchange among bank shareholders concluded that governance arrangements prevent such risks. Public interest concerns raised by SACCAWU and the Economic Development Department were addressed through undertakings by the merging parties to maintain and increase employment, expand procurement from South African suppliers, and protect BEE interests. The Tribunal concluded that the...

Court Disposition

Merger conditionally approved subject to public interest conditions.

Orders

  • The merger between Parentco (Pty) Ltd and Edcon Limited is approved subject to the conditions set out in Annexure A.
  • Edcon shall employ and train a further 2,000 new staff within two years of the approval date, subject to prevailing economic and internal circumstances.