Reunert Limited v Metal Fabricators of Zambia PLC (LM006Apr16) [2016] ZACT 52 (22 July 2016)

Reunert Limited v Metal Fabricators of Zambia PLC (LM006Apr16) [2016] ZACT 52 (22 July 2016)

The Tribunal found that the proposed transaction creates both vertical and horizontal overlaps in the manufacture and supply of copper rod and low voltage cables. However, the merging parties' combined market share in the national market for low voltage cables is below 20%, and Zamefa is not a significant player in this market. The Commission's investigation revealed that African Cables manufactures copper rod exclusively for its own use and does not supply third parties, eliminating concerns of input foreclosure. Customers confirmed the availability of alternative suppliers, and Zamefa's excess capacity incentivizes it to sell more copper rod to third parties. The Tribunal concurred with...

Citation
[2016] ZACT 52
Parties
Applicant: Reunert Limited; Respondent: Metal Fabricators of Zambia PLC
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
22 July 2016
Case Number
LM006Apr16
Procedural Posture
Merger Application / Approval
Outcome
The proposed transaction is approved unconditionally.
Judges
Andreas Wessels, Fiona Tregenna, Andiswa Ndoni
Legal Topics
Merger Control, Vertical Overlap, Horizontal Overlap, Input Foreclosure, Public Interest
Competition Law Commercial and Corporate Merger Control Vertical Overlap Horizontal Overlap Input Foreclosure Public Interest

Case Brief

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Parties

Reunert Limited

Applicant

Metal Fabricators of Zambia PLC

Respondent

Procedural Posture

Merger Application / Approval

Legal Issues

  1. 1 Whether the proposed merger between Reunert Limited and Metal Fabricators of Zambia PLC is likely to substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the transaction raises any public interest concerns, including effects on employment.
  3. 3 Whether the merger creates vertical or horizontal overlaps that could result in input or customer foreclosure.

Ratio Decidendi

The Tribunal found that the proposed transaction creates both vertical and horizontal overlaps in the manufacture and supply of copper rod and low voltage cables. However, the merging parties' combined market share in the national market for low voltage cables is below 20%, and Zamefa is not a significant player in this market. The Commission's investigation revealed that African Cables manufactures copper rod exclusively for its own use and does not supply third parties, eliminating concerns of input foreclosure. Customers confirmed the availability of alternative suppliers, and Zamefa's excess capacity incentivizes it to sell more copper rod to third parties. The Tribunal concurred with...

Court Disposition

The proposed transaction is approved unconditionally.

Orders

  • The merger between Reunert Limited and Metal Fabricators of Zambia PLC is approved without conditions.
  • No adverse findings on competition or public interest were made.