Steinhoff Doors and Building Material (Pty) Ltd v Hardware Warehouse Ltd (95/LM/OCT12) [2013] ZACT 4 (5 February 2013)

Steinhoff Doors and Building Material (Pty) Ltd v Hardware Warehouse Ltd (95/LM/OCT12) [2013] ZACT 4 (5 February 2013)

The Tribunal found that the merger between SDBM and HW would not substantially prevent or lessen competition in any relevant market. The parties' activities do not overlap geographically except in Nelspruit, where sufficient competition exists from other large and independent hardware stores. The product offerings and customer profiles are differentiated, reducing the likelihood of direct competition. Vertical effects arising from PG Bison's supply to HW are negligible, as HW constitutes less than 1% of PG Bison's sales. The public interest concern regarding the retrenchment of 20 skilled head office employees is not substantial, given their skill level and the possibility of redeployment...

Citation
[2013] ZACT 4
Parties
Applicant: Steinhoff Doors and Building Material Proprietary Limited; Respondent: Hardware Warehouse Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
5 February 2013
Case Number
95/LM/OCT12
Procedural Posture
Merger Application / Merger Approval
Outcome
Merger approved unconditionally.
Judges
Norman Manoim, Yasmin Carrim, Medi Mokuena
Legal Topics
Horizontal Merger, Vertical Merger, Public Interest, Market Definition, Employment Effects
Competition Law Horizontal Merger Vertical Merger Public Interest Market Definition Employment Effects

Case Brief

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Parties

Steinhoff Doors and Building Material Proprietary Limited

Applicant

Hardware Warehouse Limited

Respondent

Procedural Posture

Merger Application / Merger Approval

Legal Issues

  1. 1 Whether the proposed merger between SDBM and HW would substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the merger raises significant public interest concerns, particularly regarding employment.
  3. 3 Whether vertical integration through PG Bison's supply to HW creates competition concerns.

Ratio Decidendi

The Tribunal found that the merger between SDBM and HW would not substantially prevent or lessen competition in any relevant market. The parties' activities do not overlap geographically except in Nelspruit, where sufficient competition exists from other large and independent hardware stores. The product offerings and customer profiles are differentiated, reducing the likelihood of direct competition. Vertical effects arising from PG Bison's supply to HW are negligible, as HW constitutes less than 1% of PG Bison's sales. The public interest concern regarding the retrenchment of 20 skilled head office employees is not substantial, given their skill level and the possibility of redeployment...

Court Disposition

Merger approved unconditionally.

Orders

  • The proposed merger between Steinhoff Doors and Building Material (Pty) Ltd and Hardware Warehouse Limited is approved without conditions.
  • The merging parties must notify the Competition Commission of any retrenchments resulting from the merger.