Rio Tinto PLC and Alcan Inc (86/LM/Aug07) [2007] ZACT 89; [2008] 1 CPLR 167 (CT) (13 November 2007)

Rio Tinto PLC and Alcan Inc (86/LM/Aug07) [2007] ZACT 89; [2008] 1 CPLR 167 (CT) (13 November 2007)

The Tribunal found that the merger would result in the world's largest producer of primary aluminium, but credible alternative suppliers exist in both the standard and high purity aluminium markets. The merged entity's market shares, while significant, would not enable it to raise prices profitably due to the high countervailing power of customers. Furthermore, the parties have minimal operations in South Africa in the relevant markets, and the transaction does not raise any significant public interest concerns. Accordingly, the merger was approved without conditions.

Citation
[2007] ZACT 89
Parties
Applicant: Rio Tinto PLC; Respondent: Alcan Inc
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
13 November 2007
Case Number
86/LM/Aug07
Procedural Posture
Merger Control / Approval
Outcome
Merger approved without conditions.
Judges
U Bhoola, Y Carrim, M Holden
Legal Topics
Merger Control, Market Definition, Public Interest, Countervailing Power
Competition Law Commercial and Corporate Merger Control Market Definition Public Interest Countervailing Power

Case Brief

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Parties

Rio Tinto PLC

Applicant

Alcan Inc

Respondent

Procedural Posture

Merger Control / Approval

Legal Issues

  1. 1 Does the proposed merger between Rio Tinto PLC and Alcan Inc substantially prevent or lessen competition in the relevant markets?
  2. 2 Are there any significant public interest concerns arising from the transaction?
  3. 3 Will the merged entity be able to raise prices profitably in the high purity aluminium market?

Ratio Decidendi

The Tribunal found that the merger would result in the world's largest producer of primary aluminium, but credible alternative suppliers exist in both the standard and high purity aluminium markets. The merged entity's market shares, while significant, would not enable it to raise prices profitably due to the high countervailing power of customers. Furthermore, the parties have minimal operations in South Africa in the relevant markets, and the transaction does not raise any significant public interest concerns. Accordingly, the merger was approved without conditions.

Court Disposition

Merger approved without conditions.

Orders

  • The merger between Rio Tinto PLC and Alcan Inc is approved unconditionally.