Retailability Proprietary Limited v Parts of the Edgars business conducted by Edcon Limited in South Africa (LM100Aug20) [2020] ZACT 72 (11 November 2020)

Retailability Proprietary Limited v Parts of the Edgars business conducted by Edcon Limited in South Africa (LM100Aug20) [2020] ZACT 72 (11 November 2020)

The Tribunal found that the proposed transaction would not substantially prevent or lessen competition in the relevant markets for apparel, footwear, accessories, cellphones, and cosmetics. The merged entity's market shares would remain moderate, and significant competitors would continue to operate. The transaction was likely to have a positive effect on employment, saving 5,200 jobs and preserving 120 stores, with indirect benefits to suppliers and service providers. The conditions proposed by the merging parties, including a three-year moratorium on merger-related retrenchments and preferential re-employment for former Edcon employees, were deemed reasonable and sufficient to address...

Citation
[2020] ZACT 72
Parties
Applicant: Retailability Proprietary Limited; Respondent: Parts of the Edgars business conducted by Edcon Limited in South Africa
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
11 November 2020
Case Number
LM100Aug20
Procedural Posture
Merger Control / Tribunal Approval With Conditions
Outcome
Merger approved subject to conditions.
Judges
M Mazwai, Y Carrim, E Daniels
Legal Topics
Merger Control, Public Interest, Employment Protection, Market Share Analysis, Business Rescue, Remedies and Conditions
Competition Law Commercial and Corporate Merger Control Public Interest Employment Protection Market Share Analysis Business Rescue Remedies and Conditions

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Parties

Retailability Proprietary Limited

Applicant

Parts of the Edgars business conducted by Edcon Limited in South Africa

Respondent

Procedural Posture

Merger Control / Tribunal Approval With Conditions

Legal Issues

  1. 1 Whether the proposed acquisition of parts of the Edgars business by Retailability would substantially prevent or lessen competition in the relevant markets.
  2. 2 Whether the transaction would have a negative impact on employment and public interest factors.
  3. 3 Whether the conditions proposed adequately address concerns raised by SACCAWU regarding retrenchments and terms of employment.

Ratio Decidendi

The Tribunal found that the proposed transaction would not substantially prevent or lessen competition in the relevant markets for apparel, footwear, accessories, cellphones, and cosmetics. The merged entity's market shares would remain moderate, and significant competitors would continue to operate. The transaction was likely to have a positive effect on employment, saving 5,200 jobs and preserving 120 stores, with indirect benefits to suppliers and service providers. The conditions proposed by the merging parties, including a three-year moratorium on merger-related retrenchments and preferential re-employment for former Edcon employees, were deemed reasonable and sufficient to address...

Court Disposition

Merger approved subject to conditions.

Orders

  • The proposed transaction is approved subject to a three-year moratorium on merger-related retrenchments for employees of both Retailability and the Edgars Business.
  • Retailability must give preference to former Edcon employees for vacancies arising within three years of implementation.