Sasol Chemical Industries Ltd and Polyfos (Pty) Ltd (91/LM/Oct00) [2000] ZACT 50 (20 December 2000)

Sasol Chemical Industries Ltd and Polyfos (Pty) Ltd (91/LM/Oct00) [2000] ZACT 50 (20 December 2000)

The Tribunal found that although Polyfos is the sole producer of STPP in South Africa, the merger does not alter the competitive situation in the market. The only consequence is that a joint controlling shareholder becomes the sole shareholder. Imports account for 17% of the market and exert competitive pressure, with Polyfos having lost major customers to imports. Customers expressed no objections, and strong countervailing power exists through Lever Pond's. The merger does not raise any public interest concerns, and employment terms remain unaffected. Therefore, the merger will not substantially prevent or lessen competition in the relevant market and is approved without conditions.

Citation
[2000] ZACT 50
Parties
Applicant: Sasol Chemical Industries Ltd; Respondent: Polyfos (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
20 December 2000
Case Number
91/LM/Oct00
Procedural Posture
Large Merger / Merger Clearance Approval
Outcome
Merger approved without conditions.
Judges
N.M. Manoim, D.H. Lewis, D.R. Terblanche
Legal Topics
Vertical Merger, Market Definition, Import Competition, Public Interest Consideration
Competition Law Commercial and Corporate Vertical Merger Market Definition Import Competition Public Interest Consideration

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Parties

Sasol Chemical Industries Ltd

Applicant

Polyfos (Pty) Ltd

Respondent

Procedural Posture

Large Merger / Merger Clearance Approval

Legal Issues

  1. 1 Whether the vertical merger between Sasol Chemical Industries Ltd and Polyfos (Pty) Ltd will substantially prevent or lessen competition in the relevant market.
  2. 2 Whether the merger raises any public interest concerns under section 16(3) of the Competition Act.

Ratio Decidendi

The Tribunal found that although Polyfos is the sole producer of STPP in South Africa, the merger does not alter the competitive situation in the market. The only consequence is that a joint controlling shareholder becomes the sole shareholder. Imports account for 17% of the market and exert competitive pressure, with Polyfos having lost major customers to imports. Customers expressed no objections, and strong countervailing power exists through Lever Pond's. The merger does not raise any public interest concerns, and employment terms remain unaffected. Therefore, the merger will not substantially prevent or lessen competition in the relevant market and is approved without conditions.

Court Disposition

Merger approved without conditions.

Orders

  • The merger between Sasol Chemical Industries Ltd and Polyfos (Pty) Ltd is approved without conditions.
  • A Merger Clearance Certificate is issued.