Sinosteel Group Corporation Limited v Deen Holdings Corporation Limited (LM123Nov21) [2021] ZACT 81 (18 March 2021)

Sinosteel Group Corporation Limited v Deen Holdings Corporation Limited (LM123Nov21) [2021] ZACT 81 (18 March 2021)

The Tribunal found that the proposed merger between Sinosteel Group Corporation Limited and Deen Holdings Corporation Limited would not substantially prevent or lessen competition in either the national market for chrome mining and supply or the global market for trading chrome ore. The parties' combined market shares were low, and there was no significant risk of foreclosure. The Tribunal also considered public interest factors, including employment and the spread of ownership. It concluded that historic and contemplated retrenchments were not merger-related, but imposed a two-year moratorium on merger-specific retrenchments and a vacancies clause to protect affected employees. The...

Citation
[2021] ZACT 81
Parties
Applicant: Sinosteel Group Corporation Limited; Respondent: Deen Holdings Corporation Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
18 March 2021
Case Number
LM123Nov21
Procedural Posture
Merger Control / Conditional Approval of Large Merger
Outcome
Merger conditionally approved subject to public interest and employment-related conditions.
Judges
I Valodia, E Daniels, L Mncube
Legal Topics
Merger Control, Public Interest Conditions, Employment Effects, Greater Spread of Ownership
Competition Law Merger Control Public Interest Conditions Employment Effects Greater Spread of Ownership

Case Brief

Summary, issues, holding and outcome

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Parties

Sinosteel Group Corporation Limited

Applicant

Deen Holdings Corporation Limited

Respondent

Procedural Posture

Merger Control / Conditional Approval of Large Merger

Legal Issues

  1. 1 Whether the proposed merger will substantially prevent or lessen competition in the relevant markets.
  2. 2 Whether the merger raises public interest concerns, specifically regarding employment and the spread of ownership.
  3. 3 Whether the merger should be approved subject to conditions addressing employment and ownership concerns.

Ratio Decidendi

The Tribunal found that the proposed merger between Sinosteel Group Corporation Limited and Deen Holdings Corporation Limited would not substantially prevent or lessen competition in either the national market for chrome mining and supply or the global market for trading chrome ore. The parties' combined market shares were low, and there was no significant risk of foreclosure. The Tribunal also considered public interest factors, including employment and the spread of ownership. It concluded that historic and contemplated retrenchments were not merger-related, but imposed a two-year moratorium on merger-specific retrenchments and a vacancies clause to protect affected employees. The...

Court Disposition

Merger conditionally approved subject to public interest and employment-related conditions.

Orders

  • The merger between Sinosteel Group Corporation Limited and Deen Holdings Corporation Limited is approved subject to the conditions set out in Annexure A.
  • A two-year moratorium on merger-specific retrenchments is imposed.