Silicon Technology (Pty) Ltd and Calcium Carbide Division of Sentrachem Limited (63/LM/Sep02) [2003] ZACT 3 (15 January 2003)

Silicon Technology (Pty) Ltd and Calcium Carbide Division of Sentrachem Limited (63/LM/Sep02) [2003] ZACT 3 (15 January 2003)

The Tribunal found that there is no product overlap between the merging parties, as the products produced by the acquirer and the target businesses are not substitutable and do not compete in the same market. The transaction does give rise to vertical integration, since the target company consumes anthracite in its production process and the acquiring group produces anthracite. However, the target’s purchases from the acquiring group constitute less than 1% of the total anthracite market, and the target requires a particular blend of anthracite that cannot be supplied solely by the acquiring group. Therefore, foreclosure of the anthracite market is unlikely. The Tribunal also found that...

Citation
[2003] ZACT 3
Parties
Applicant: Silicon Technology (Pty) Ltd; Respondent: Calcium Carbide Division of Sentrachem Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
15 January 2003
Case Number
63/LM/Sep02
Procedural Posture
Large Merger / Approval
Outcome
Merger approved unconditionally.
Judges
N. Manoim, F. Fourie, M. Holden
Legal Topics
Vertical Integration, Market Foreclosure, Merger Control, Public Interest
Competition Law Commercial and Corporate Vertical Integration Market Foreclosure Merger Control Public Interest

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 2 Authorities cited 1 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

Silicon Technology (Pty) Ltd

Applicant

Calcium Carbide Division of Sentrachem Limited

Respondent

Procedural Posture

Large Merger / Approval

Legal Issues

  1. 1 Whether the merger will result in a substantial lessening of competition in the relevant markets.
  2. 2 Whether the vertical integration arising from the transaction will lead to foreclosure of the anthracite market.
  3. 3 Whether there are any public interest concerns, including employment, that would affect approval of the merger.

Ratio Decidendi

The Tribunal found that there is no product overlap between the merging parties, as the products produced by the acquirer and the target businesses are not substitutable and do not compete in the same market. The transaction does give rise to vertical integration, since the target company consumes anthracite in its production process and the acquiring group produces anthracite. However, the target’s purchases from the acquiring group constitute less than 1% of the total anthracite market, and the target requires a particular blend of anthracite that cannot be supplied solely by the acquiring group. Therefore, foreclosure of the anthracite market is unlikely. The Tribunal also found that...

Court Disposition

Merger approved unconditionally.

Orders

  • The merger between Silicon Technology (Pty) Ltd and Sentrachem Limited in respect of the Calcium Carbide Division is approved unconditionally.
  • No conditions are imposed on the approval.