Safmarine Container Lines N.V. and Unicorn Lines Division of Unicorn Freight Services (Pty) Ltd (50/LM/Jul02) [2002] ZACT 52 (20 September 2002)

Safmarine Container Lines N.V. and Unicorn Lines Division of Unicorn Freight Services (Pty) Ltd (50/LM/Jul02) [2002] ZACT 52 (20 September 2002)

The Tribunal found that the merger would not substantially lessen competition in the relevant market. The combined market share of the merged entity and its sister company, Maersk Sealand, on the RSA/Angola route would be 42%, but there are at least ten other competitors, making the market highly competitive and overtraded. Freight rates have declined and the number of vessel calls has increased, indicating competitive pressure. Barriers to entry are low due to trade liberalization, and alternative feeder and transport services are readily available. Vertical integration is common in the industry and does not foreclose competitors, as Unifeeder will remain dependent on third-party...

Citation
[2002] ZACT 52
Parties
Applicant: Safmarine Container Lines N.V.; Respondent: Unicorn Lines Division of Unicorn Freight Services (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
20 September 2002
Case Number
50/LM/Jul02
Procedural Posture
Large Merger / Merger Clearance Approval
Outcome
Merger approved unconditionally; no substantial lessening of competition or public interest concerns identified.
Judges
N. Manoim, D. H. Lewis, U. Bhoola
Legal Topics
Large Merger Review, Market Share Analysis, Vertical Integration, Barriers to Entry, Public Interest, Coastal Shipping Services
Competition Law Commercial and Corporate Large Merger Review Market Share Analysis Vertical Integration Barriers to Entry Public Interest Coastal Shipping Services

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Parties

Safmarine Container Lines N.V.

Applicant

Unicorn Lines Division of Unicorn Freight Services (Pty) Ltd

Respondent

Procedural Posture

Large Merger / Merger Clearance Approval

Legal Issues

  1. 1 Whether the merger between Safmarine Container Lines N.V. and Unicorn Lines Division of Unicorn Freight Services (Pty) Ltd will substantially lessen competition in the relevant market.
  2. 2 Whether the merger raises any public interest concerns that would prevent approval.
  3. 3 Whether vertical integration resulting from the merger would foreclose competitors from accessing feeder services.

Ratio Decidendi

The Tribunal found that the merger would not substantially lessen competition in the relevant market. The combined market share of the merged entity and its sister company, Maersk Sealand, on the RSA/Angola route would be 42%, but there are at least ten other competitors, making the market highly competitive and overtraded. Freight rates have declined and the number of vessel calls has increased, indicating competitive pressure. Barriers to entry are low due to trade liberalization, and alternative feeder and transport services are readily available. Vertical integration is common in the industry and does not foreclose competitors, as Unifeeder will remain dependent on third-party...

Court Disposition

Merger approved unconditionally; no substantial lessening of competition or public interest concerns identified.

Orders

  • The merger between Safmarine Container Lines N.V. and Unicorn Lines Division of Unicorn Freight Services (Pty) Ltd is approved unconditionally.
  • No conditions are imposed on the approval of the merger.