Reunert Ltd v Siemens Enterprise Communications (Pty) Ltd (60/LM/Aug09) [2010] ZACT 17; [2010] 1 CPLR 162 (CT) (2 March 2010)

Reunert Ltd v Siemens Enterprise Communications (Pty) Ltd (60/LM/Aug09) [2010] ZACT 17; [2010] 1 CPLR 162 (CT) (2 March 2010)

The Tribunal found that the activities of the merging parties overlap in the distribution of PABX Systems, with Reunert (through Nashua Electronics) distributing small to medium capacity systems and Siemens Enterprise Communications distributing large capacity systems. The market for PABX Systems is highly fragmented, with significant competition from other firms and strong buyer power among customers. The vertical relationship between the parties was found to be insignificant, as Nashua Office Automation's purchases from Siemens Enterprise Communications represented only 0.1% of the latter's distribution business. No competitors objected to the merger, and customer concerns were...

Citation
[2010] ZACT 17
Parties
Applicant: Reunert Ltd; Respondent: Siemens Enterprise Communications (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
2 March 2010
Case Number
60/LM/Aug09
Procedural Posture
Merger Control / Merger Approval
Outcome
The merger between Reunert Ltd and Siemens Enterprise Communications (Pty) Ltd is unconditionally approved.
Judges
N Manoim, A Wessels, A Ndoni
Legal Topics
Merger Control, Market Definition, Vertical Relationships, Public Interest, Buyer Power
Competition Law Commercial and Corporate Merger Control Market Definition Vertical Relationships Public Interest Buyer Power

Case Brief

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Parties

Reunert Ltd

Applicant

Siemens Enterprise Communications (Pty) Ltd

Respondent

Procedural Posture

Merger Control / Merger Approval

Legal Issues

  1. 1 Whether the acquisition by Reunert Ltd of the remaining 60% shares in Siemens Enterprise Communications (Pty) Ltd will substantially prevent or lessen competition in the market for distribution of PABX Systems.
  2. 2 Whether there are any significant public interest concerns arising from the merger.

Ratio Decidendi

The Tribunal found that the activities of the merging parties overlap in the distribution of PABX Systems, with Reunert (through Nashua Electronics) distributing small to medium capacity systems and Siemens Enterprise Communications distributing large capacity systems. The market for PABX Systems is highly fragmented, with significant competition from other firms and strong buyer power among customers. The vertical relationship between the parties was found to be insignificant, as Nashua Office Automation's purchases from Siemens Enterprise Communications represented only 0.1% of the latter's distribution business. No competitors objected to the merger, and customer concerns were...

Court Disposition

The merger between Reunert Ltd and Siemens Enterprise Communications (Pty) Ltd is unconditionally approved.

Orders

  • The merger is approved without conditions.