Shoprite Checkers (Pty) Ltd v Metcash Seven Eleven (Pty) Ltd & a Portion of the Friendly Distribution Division of Metcash Trading Africa (Pty) Ltd (30/LM/Apr11) [2011] ZACT 62; [2011] 2 CPLR 346 (CT) (26 August 2011)

Shoprite Checkers (Pty) Ltd v Metcash Seven Eleven (Pty) Ltd & a Portion of the Friendly Distribution Division of Metcash Trading Africa (Pty) Ltd (30/LM/Apr11) [2011] ZACT 62; [2011] 2 CPLR 346 (CT) (26 August 2011)

The Tribunal found that the proposed merger between Shoprite and Metcash Seven Eleven, including the Friendly Distribution Division, would not substantially prevent or lessen competition in the relevant FMCG retail and franchise markets. The market shares of the merging parties were below the de minimis threshold, and the markets were characterized by high levels of competition, low barriers to entry, and saturation. Concerns regarding employment losses were addressed by the merging parties' undertaking to find alternative employment for affected employees, and the Tribunal imposed this as a condition of approval. No other significant public interest issues were identified. Accordingly,...

Citation
[2011] ZACT 62
Parties
Applicant: Shoprite Checkers (Pty) Ltd; Respondent: Metcash Seven Eleven (Pty) Ltd & a Portion of the Friendly Distribution Division of Metcash Trading Africa (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
26 August 2011
Case Number
30/LM/Apr11
Procedural Posture
Merger Application / Conditional Approval
Outcome
Merger conditionally approved subject to employment-related conditions.
Judges
Y Carrim, Medi Mokuena, A Wessels
Legal Topics
Large Merger Review, Public Interest Conditions, Horizontal Overlap, Vertical Relationships, Employment Effects
Competition Law Commercial and Corporate Large Merger Review Public Interest Conditions Horizontal Overlap Vertical Relationships Employment Effects

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Parties

Shoprite Checkers (Pty) Ltd

Applicant

Metcash Seven Eleven (Pty) Ltd & a Portion of the Friendly Distribution Division of Metcash Trading Africa (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Conditional Approval

Legal Issues

  1. 1 Whether the proposed merger is likely to substantially prevent or lessen competition in the relevant FMCG retail and franchise markets.
  2. 2 Whether the transaction raises significant public interest concerns, particularly regarding employment losses.
  3. 3 Whether conditions should be imposed to address employment effects resulting from the merger.

Ratio Decidendi

The Tribunal found that the proposed merger between Shoprite and Metcash Seven Eleven, including the Friendly Distribution Division, would not substantially prevent or lessen competition in the relevant FMCG retail and franchise markets. The market shares of the merging parties were below the de minimis threshold, and the markets were characterized by high levels of competition, low barriers to entry, and saturation. Concerns regarding employment losses were addressed by the merging parties' undertaking to find alternative employment for affected employees, and the Tribunal imposed this as a condition of approval. No other significant public interest issues were identified. Accordingly,...

Court Disposition

Merger conditionally approved subject to employment-related conditions.

Orders

  • Metcash shall find alternative employment for the remaining 8 employees who have not yet been retrenched or provided with alternative employment.
  • Metcash shall find alternative employment for 18 employees who have applied for retrenchment but whose applications have not yet been accepted, unless Metcash accepts such applications for voluntary retrenchment.