Stefanutti Stocks (Pty) Ltd v Ax.sys Projects (Pty) Ltd and Another (LM069Jun17) [2018] ZACT 75; [2018] 1 CPLR 334 (CT) (22 March 2018)

Stefanutti Stocks (Pty) Ltd v Ax.sys Projects (Pty) Ltd and Another (LM069Jun17) [2018] ZACT 75; [2018] 1 CPLR 334 (CT) (22 March 2018)

The Tribunal found that the proposed merger would not substantially prevent or lessen competition in any relevant market, as the post-merger market shares were low and several viable competitors remained. The transaction was found to advance public interest objectives by promoting the development of black-owned construction firms and supporting transformation in the industry. The Tribunal accepted the Commission's concerns regarding the allocation of work and information sharing, and imposed conditions to ensure equal treatment of Emerging Contractors and prevent operational personnel from serving as Fund trustees. The Tribunal concluded that, subject to these conditions, the transaction...

Citation
[2018] ZACT 75
Parties
Applicant: Stefanutti Stocks (Pty) Ltd; Respondent: Ax.sys Projects (Pty) Ltd; Respondent: TN Molefe Construction (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
22 March 2018
Case Number
LM069Jun17
Procedural Posture
Merger Application / Tribunal Approval With Conditions
Outcome
The merger is approved subject to conditions.
Judges
Yasmin Carrim, AW Wessels, Medi Mokuena
Legal Topics
Merger Control, Public Interest Benefits, Black Economic Empowerment, Mentorship Programmes, Information Sharing Safeguards
Competition Law Commercial and Corporate Merger Control Public Interest Benefits Black Economic Empowerment Mentorship Programmes Information Sharing Safeguards

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Parties

Stefanutti Stocks (Pty) Ltd

Applicant

Ax.sys Projects (Pty) Ltd

Respondent

TN Molefe Construction (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Tribunal Approval With Conditions

Legal Issues

  1. 1 Whether the proposed merger between Stefanutti Stocks and the Emerging Contractors would substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the transaction would result in public interest benefits, particularly for historically disadvantaged persons.
  3. 3 Whether the conditions imposed adequately address risks of unfair allocation of work and information sharing among alliance members.

Ratio Decidendi

The Tribunal found that the proposed merger would not substantially prevent or lessen competition in any relevant market, as the post-merger market shares were low and several viable competitors remained. The transaction was found to advance public interest objectives by promoting the development of black-owned construction firms and supporting transformation in the industry. The Tribunal accepted the Commission's concerns regarding the allocation of work and information sharing, and imposed conditions to ensure equal treatment of Emerging Contractors and prevent operational personnel from serving as Fund trustees. The Tribunal concluded that, subject to these conditions, the transaction...

Court Disposition

The merger is approved subject to conditions.

Orders

  • The merger between Stefanutti Stocks (Pty) Ltd and Ax.sys Projects (Pty) Ltd and TN Molefe Construction (Pty) Ltd is approved subject to the conditions set out in Annexure A.
  • The Emerging Contractors must be treated equally in the allocation of work within the alliance.