Spar Group Ltd v Fraqur 165 (Pty) Ltd and Another (59/LM/Sep10) [2010] ZACT 82 (22 November 2010)

Spar Group Ltd v Fraqur 165 (Pty) Ltd and Another (59/LM/Sep10) [2010] ZACT 82 (22 November 2010)

The Tribunal found that there was no horizontal overlap between the activities of the merging parties, as Spar Group is a wholesaler and the target firms are retailers. The retail outlets owned by Spar Group are not located near the target stores. Vertically, Spar Group has no incentive to foreclose its Spar Guild members, as they are its only customers and it does not supply competitors. The Tribunal also considered the objection raised by Mr Baijnath but found that the merger would not affect his litigation or employment status, as the merging parties undertook to secure his position for at least a year. There were no public interest concerns identified. Accordingly, the merger was...

Citation
[2010] ZACT 82
Parties
Applicant: Spar Group Ltd; Respondent: Fraqur 165 (Pty) Ltd; Respondent: Northern Light Trading 128 (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
22 November 2010
Case Number
59/LM/Sep10
Procedural Posture
Merger Application / Approval
Outcome
Merger approved unconditionally.
Judges
Norman Manoim, Andreas Wessels, Yasmin Carrim
Legal Topics
Merger Control, Vertical Relationships, Public Interest, Market Share Protection
Competition Law Commercial and Corporate Merger Control Vertical Relationships Public Interest Market Share Protection

Case Brief

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Parties

Spar Group Ltd

Applicant

Fraqur 165 (Pty) Ltd

Respondent

Northern Light Trading 128 (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Approval

Legal Issues

  1. 1 Whether the proposed merger would substantially prevent or lessen competition in any relevant market.
  2. 2 Whether there are any public interest concerns arising from the proposed transaction.
  3. 3 Whether the merger would result in job losses at the target firms.

Ratio Decidendi

The Tribunal found that there was no horizontal overlap between the activities of the merging parties, as Spar Group is a wholesaler and the target firms are retailers. The retail outlets owned by Spar Group are not located near the target stores. Vertically, Spar Group has no incentive to foreclose its Spar Guild members, as they are its only customers and it does not supply competitors. The Tribunal also considered the objection raised by Mr Baijnath but found that the merger would not affect his litigation or employment status, as the merging parties undertook to secure his position for at least a year. There were no public interest concerns identified. Accordingly, the merger was...

Court Disposition

Merger approved unconditionally.

Orders

  • The merger between Spar Group Ltd and Fraqur 165 (Pty) Ltd and Northern Light Trading 128 (Pty) Ltd is approved unconditionally.
  • No job losses shall result from the merger, and the operations director's position shall be secure for at least the next year.