Steinhoff Africa Holdings (Pty) Ltd and BCM Holdings Limited (Pty) Ltd and Others (35/LM/Apr07) [2007] ZACT 87; [2007] 2 CPLR 426 (CT) (9 November 2007)

Steinhoff Africa Holdings (Pty) Ltd and BCM Holdings Limited (Pty) Ltd and Others (35/LM/Apr07) [2007] ZACT 87; [2007] 2 CPLR 426 (CT) (9 November 2007)

The Tribunal found that the proposed merger resulted in both horizontal and vertical integration, but the combined market shares in the relevant markets were not sufficient to raise competition concerns. In the freight forwarding market, the merged entity would hold less than 1% market share, and the market is highly competitive with low barriers to entry. In the bedding components and z-springs markets, Steinhoff's post-merger share would not enable it to exercise portfolio power or exclude rivals, especially as the target firms are not dominant suppliers and significant competitors remain. The Tribunal also considered the related Platoon/PG Bison transaction, which would remove...

Citation
[2007] ZACT 87
Parties
Applicant: Steinhoff Africa Holdings (Pty) Ltd; Respondent: BCM Holdings Limited (Pty) Ltd; Respondent: International Wire Converters (Pty) Ltd; Respondent: Buffalo Freight Systems (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
9 November 2007
Case Number
35/LM/Apr07
Procedural Posture
Merger Application / Tribunal Approval With Conditions
Outcome
Merger approved subject to condition.
Judges
D Lewis, N Manoim, L Reyburn
Legal Topics
Horizontal Merger, Vertical Integration, Market Definition, Portfolio Power, Conditional Approval
Competition Law Commercial and Corporate Horizontal Merger Vertical Integration Market Definition Portfolio Power Conditional Approval

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Parties

Steinhoff Africa Holdings (Pty) Ltd

Applicant

BCM Holdings Limited (Pty) Ltd

Respondent

International Wire Converters (Pty) Ltd

Respondent

Buffalo Freight Systems (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Tribunal Approval With Conditions

Legal Issues

  1. 1 Whether the proposed merger raises competition concerns in the relevant product and geographic markets.
  2. 2 Whether the transaction results in anti-competitive horizontal or vertical effects.
  3. 3 Whether the merger should be approved subject to conditions related to a separate transaction.

Ratio Decidendi

The Tribunal found that the proposed merger resulted in both horizontal and vertical integration, but the combined market shares in the relevant markets were not sufficient to raise competition concerns. In the freight forwarding market, the merged entity would hold less than 1% market share, and the market is highly competitive with low barriers to entry. In the bedding components and z-springs markets, Steinhoff's post-merger share would not enable it to exercise portfolio power or exclude rivals, especially as the target firms are not dominant suppliers and significant competitors remain. The Tribunal also considered the related Platoon/PG Bison transaction, which would remove...

Court Disposition

Merger approved subject to condition.

Orders

  • The merger between Steinhoff Africa Holdings (Pty) Ltd and BCM Holdings Limited (Pty) Ltd, International Wire Converters (Pty) Ltd, and Buffalo Freight Systems (Pty) Ltd is approved subject to the implementation of the Platoon/PG Bison transaction.
  • No public interest conditions are imposed.