Steinhoff Doors and Building Materials (Pty) Ltd v Illiad Africa Limited (LM128Sep15) [2016] ZACT 19 (11 January 2016)

Steinhoff Doors and Building Materials (Pty) Ltd v Illiad Africa Limited (LM128Sep15) [2016] ZACT 19 (11 January 2016)

The Tribunal found that the proposed merger would not substantially prevent or lessen competition in the national market for building supplies, hardware, and related products, as the merged entity's market share would remain below 12% and significant competitors would continue to operate. In regional markets with store overlaps, competition remained robust due to the presence of other national players. Regarding vertical overlap, the Tribunal agreed with the Commission that foreclosure was unlikely because Iliad accounted for only a small portion of PG Bison's sales. Public interest concerns were addressed through agreed employment conditions, limiting retrenchments and requiring efforts...

Citation
[2016] ZACT 19
Parties
Applicant: Steinhoff Doors and Building Materials (Pty) Ltd; Respondent: Illiad Africa Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
11 January 2016
Case Number
LM128Sep15
Procedural Posture
Large Merger Review / Final Approval With Conditions
Outcome
Merger approved subject to employment-related conditions.
Judges
Norman Manoim, Andiswa Ndoni, Anton Roskam
Legal Topics
Large Merger Review, Horizontal Overlap, Vertical Overlap, Public Interest Conditions, Employment Retrenchments
Competition Law Commercial and Corporate Large Merger Review Horizontal Overlap Vertical Overlap Public Interest Conditions Employment Retrenchments

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Parties

Steinhoff Doors and Building Materials (Pty) Ltd

Applicant

Illiad Africa Limited

Respondent

Procedural Posture

Large Merger Review / Final Approval With Conditions

Legal Issues

  1. 1 Whether the proposed merger between SDBM and Iliad is likely to substantially prevent or lessen competition in the relevant market.
  2. 2 Whether the merger raises public interest concerns, particularly regarding employment retrenchments.
  3. 3 Whether the merger creates horizontal and vertical overlaps that may result in anti-competitive effects.

Ratio Decidendi

The Tribunal found that the proposed merger would not substantially prevent or lessen competition in the national market for building supplies, hardware, and related products, as the merged entity's market share would remain below 12% and significant competitors would continue to operate. In regional markets with store overlaps, competition remained robust due to the presence of other national players. Regarding vertical overlap, the Tribunal agreed with the Commission that foreclosure was unlikely because Iliad accounted for only a small portion of PG Bison's sales. Public interest concerns were addressed through agreed employment conditions, limiting retrenchments and requiring efforts...

Court Disposition

Merger approved subject to employment-related conditions.

Orders

  • No retrenchments to be effected in the merging parties' stores for 24 months after the implementation date of the merger.
  • No more than 50 retrenchments to be effected at the merging parties' head offices for 18 months after the implementation date.