Saudi Arabian Oil Company v Saudi Basic Industries Corporation (LM029May19) [2019] ZACT 75 (21 October 2019)

Saudi Arabian Oil Company v Saudi Basic Industries Corporation (LM029May19) [2019] ZACT 75 (21 October 2019)

The Tribunal found that the proposed merger between Saudi Arabian Oil Company and Saudi Basic Industries Corporation would not result in a substantial prevention or lessening of competition in any relevant market. The merged entity's market shares in the relevant product markets (EPDM, PE, and PBR) would remain moderate, and significant competitors would continue to exert competitive constraints. Concerns raised about the creation of a consortium through joint ventures were investigated and found to be unfounded, as the joint ventures were limited in scope and did not facilitate anti-competitive coordination. Furthermore, the transaction did not raise any public interest concerns....

Citation
[2019] ZACT 75
Parties
Applicant: Saudi Arabian Oil Company; Respondent: Saudi Basic Industries Corporation
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
21 October 2019
Case Number
LM029May19
Procedural Posture
Merger Control / Tribunal Approval
Outcome
The proposed merger is approved unconditionally.
Judges
A Roskam, E Daniels, AW Wessels
Legal Topics
Merger Control, Market Share Analysis, Public Interest, Joint Ventures, Product Overlap
Competition Law Merger Control Market Share Analysis Public Interest Joint Ventures Product Overlap

Case Brief

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Parties

Saudi Arabian Oil Company

Applicant

Saudi Basic Industries Corporation

Respondent

Procedural Posture

Merger Control / Tribunal Approval

Legal Issues

  1. 1 Whether the proposed merger between Saudi Arabian Oil Company and Saudi Basic Industries Corporation will substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the transaction raises any public interest concerns.

Ratio Decidendi

The Tribunal found that the proposed merger between Saudi Arabian Oil Company and Saudi Basic Industries Corporation would not result in a substantial prevention or lessening of competition in any relevant market. The merged entity's market shares in the relevant product markets (EPDM, PE, and PBR) would remain moderate, and significant competitors would continue to exert competitive constraints. Concerns raised about the creation of a consortium through joint ventures were investigated and found to be unfounded, as the joint ventures were limited in scope and did not facilitate anti-competitive coordination. Furthermore, the transaction did not raise any public interest concerns....

Court Disposition

The proposed merger is approved unconditionally.

Orders

  • The proposed transaction is approved unconditionally.