Premier Fishing SA (Pty) Ltd v Talhado Fishing Eterprises (Pty) Ltd (LM299Mar18) [2018] ZACT 15 (5 June 2018)
- Citation
- [2018] ZACT 15
- Status
- Judgment
- Jurisdiction
- South Africa
- Court
- Competition Tribunal
- Panel
- Andreas Wessels, Enver Daniels, Fiona Tregenna
- Case number
- LM299Mar18
More details
- Court
- Competition Tribunal
- Panel
- Andreas Wessels, Enver Daniels, Fiona Tregenna
- Case number
- LM299Mar18
On this page
Professional case brief
Research organized from the available case record
01
Holding and result
The Tribunal found that the merger between Premier Fishing and Talhado would result in a combined market share of less than 20% based on total allowable effort and less than 25% based on revenue figures. The Commission's investigation identified several other market participants, indicating a competitive market structure. No evidence was presented to suggest that the merger would substantially prevent or lessen competition. Furthermore, the transaction was confirmed to have no negative impact on employment or other public interest concerns. Accordingly, the Tribunal approved the merger unconditionally.
Court disposition
The merger is approved unconditionally.
Orders
- The proposed transaction between Premier Fishing SA (Pty) Ltd and Talhado Fishing Enterprises (Pty) Ltd is approved unconditionally.
02
Material facts
Parties
Premier Fishing SA (Pty) Ltd
Applicant Counsel: Ms N MiaTalhado Fishing Enterprises (Pty) Ltd
RespondentAmounts and remedies
- Premier Fishing Share Acquisition in Talhado (%): 50.31
03
Procedural history
Posture
Merger Approval / Decision
04
Questions and positions
Legal issues
- 01
Whether the proposed merger between Premier Fishing and Talhado is likely to substantially prevent or lessen competition in the relevant market.
- 02
Whether the proposed transaction raises any public interest concerns, including effects on employment.
Party arguments
- Applicant
- Premier Fishing argued that acquiring a majority stake in Talhado would enable it to grow its business and enhance operational efficiencies. The transaction was also expected to improve empowerment credentials for Talhado and increase overall efficiencies within the merged entity.
- Respondent
- Talhado submitted that the transaction would increase its empowerment credentials and operational efficiencies. Both parties, supported by the Commission, asserted that the merger would not negatively affect employment and would not raise any other public interest concerns.
05
Court’s reasoning
Legal principles
- 01
Competition Act, No. 89 of 1998
A merger may only be prohibited if it is likely to substantially prevent or lessen competition in the relevant market.
- 02
Competition Act, No. 89 of 1998
Public interest factors, including employment, must be considered in merger assessments.
06
Ratio, limits and disposition
Ratio decidendi
The Tribunal found that the merger between Premier Fishing and Talhado would result in a combined market share of less than 20% based on total allowable effort and less than 25% based on revenue figures. The Commission's investigation identified several other market participants, indicating a competitive market structure. No evidence was presented to suggest that the merger would substantially prevent or lessen competition. Furthermore, the transaction was confirmed to have no negative impact on employment or other public interest concerns. Accordingly, the Tribunal approved the merger unconditionally.
Obiter and limits
- The Tribunal noted that the bulk of squid processing generally occurs on shipping vessels, which influenced the market definition.
- The Commission's use of both total allowable effort and revenue figures provided a robust basis for market share calculation.
Court disposition
The merger is approved unconditionally.
- The proposed transaction between Premier Fishing SA (Pty) Ltd and Talhado Fishing Enterprises (Pty) Ltd is approved unconditionally.
Source and reliance status
Competition Tribunal
This page organises the available record for research. Confirm quotations, current status, and subsequent treatment against the official source before relying on the case.
Judgment reading view
Judgment text
The complete available source text.
Competition Tribunal
Judgment
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case No: LM299Mar18
In the matter between:
Premier Fishing SA (Pty) Ltd
Acquiring Firm
And
Talhado Fishing Enterprises (Pty) Ltd
Target Firm
Panel
Andreas Wessels (Presiding Member)
Enver Daniels (Tribunal Member)
Fiona Tregenna (Tribunal Member)
Order issued on 9 May 2018
Reasons issued on 5 June 2018
REASONS
FOR DECISION
Approval
[1] On 9 May 2018, the Competition Tribunal ("Tribunal") unconditionally approved the large merger involving Premier Fishing
SA (Pty) Ltd ("Premier Fishing") and Talhado Fishing Enterprises (Pty) Ltd ("Talhado").
[2] The reasons for approving the proposed transaction follow.
Parties to the transaction and their activities
Primary acquiring firm
[3] The primary acquiring firm is Premier Fishing which is ultimately controlled by Dr Iqbal Surve. Premier Fishing controls Premfish
Seafoods (Pty} Ltd and Marine Growers (Pty) Ltd.
[4] Premier Fishing is predominantly involved in commercial fishing, fish processing and marketing. Specifically relevant to the competition
assessment of this transaction are its operations in the harvesting, processing and marketing of chokka squid.
Primary target firm
[5] The primary target firm is Talhado which is controlled by Scofish (Pty) Ltd which is in turn controlled by the trustees for the time being of Standur Trust. Talhado is involved in the harvesting, processing and marketing of squid.
Proposed transaction and rationale
[6] In terms of the proposed transaction Premier Fishing intends to acquire 50.31% of the issued shares in Talhado and in a second step it will acquire shares from the minority shareholders in certain firms controlled by Talhado. The Competition Commission ("Commission")
submitted that the two-steps constitute a single indivisible transaction.
[7] Premier Fishing submitted that the proposed transaction would assist it in growing its business.
[8] Talhado submitted that the proposed transaction will increase its empowerment credentials and efficiencies.
Relevant market and impact on competition
[9] The Commission identified a horizontal overlap between the activities of the merging parties in the harvesting, processing and marketing of squid. The Commission did not delineate between harvesting, processing and marketing since the bulk of the processing of squid
generally occurs on the shipping vessels.
[10] The Commission calculated market shares using two methods. First, the Commission utilized the "total allowable effort" since that is the metric used by the Department of Agriculture, Forestry and Fisheries to regulate the sector. Using this method, the merged entity would have a national market share of less than 20% in the harvesting, processing and marketing of squid. The Commission also calculated market shares using 2017 revenue figures and on this basis found the merging parties' combined national market share to be less than 25% in the harvesting, processing and marketing of squid. According to the Commission's market investigation, other market participants include Balobi, Pioneer, Komicx, Blue Seas, Irvin & Johnson and Kaytrad. Based on the above, the Commission concluded that the proposed transaction is unlikely to substantially prevent or lessen competition in the identified relevant market.
[11] We concur with the Commission's finding that the proposed transaction is unlikely to substantially prevent or lessen competition in the relevant market.
Public interest
[12] The merging parties submitted, which was confirmed by the Commission, that the proposed transaction will not have any negative effect on employment.[1]
[13] The proposed transaction further raises no other public interest concerns.
Conclusion
[14] In light of the above, we conclude that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market. In addition, no public interest issues arise from the proposed transaction. Accordingly, we approve the proposed transaction unconditionally.
Mr Andreas Wessels
Mr Enver Daniels and Prof Fiona Tregenna concurring
5 June 2018
Tribunal Case Manager : Ms Aneesa Ravat
For the merging parties : Ms N Mia of Cliffe Dekker Hofmeyr
For the Commission
: Mr W Gumbie
[1] Record pages 6 and 50.
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