Toyota Motor Corporation (Japan) and Toyota South Africa (Pty) Ltd (61/LM/Aug02) [2002] ZACT 56 (10 October 2002)
- Citation
- [2002] ZACT 56
- Status
- Judgment
- Jurisdiction
- South Africa
- Court
- Competition Tribunal
- Panel
- N. Manoim, D. Lewis, P. Maponya
- Case number
- 61/LM/Aug02
More details
- Court
- Competition Tribunal
- Panel
- N. Manoim, D. Lewis, P. Maponya
- Case number
- 61/LM/Aug02
On this page
Professional case brief
Research organized from the available case record
01
Holding and result
The Tribunal found that the transaction merely increases Toyota Motor Corporation's shareholding in Toyota South Africa and does not alter the parties' participation in the relevant product markets. The merger does not affect competition, as Toyota Motor Corporation is not directly active in South Africa except through Toyota South Africa. Furthermore, the transaction does not present any public interest concerns and is likely to have a positive impact by increasing vehicle production and exports from South Africa. Accordingly, the merger was approved without conditions.
Court disposition
Merger approved without conditions.
Orders
- The merger between Toyota Motor Corporation (Japan) and Toyota South Africa (Pty) Ltd is approved without conditions.
02
Material facts
Parties
Toyota Motor Corporation (Japan)
ApplicantToyota South Africa (Pty) Ltd
RespondentAmounts and remedies
- Shareholding Acquired: 39.3
03
Procedural history
Posture
Large Merger / Merger Approval
04
Questions and positions
Legal issues
- 01
Whether the acquisition by Toyota Motor Corporation of a majority shareholding in Toyota South Africa raises competition concerns in the relevant product markets.
- 02
Whether the merger presents any public interest concerns under the Competition Act.
Party arguments
- Applicant
- Toyota Motor Corporation argued that the acquisition of additional shares in Toyota South Africa would facilitate the integration of the South African entity into its global production network, potentially increasing exports and production in South Africa. The transaction would not alter the current market participation or competitive dynamics.
- Respondent
- Toyota South Africa supported the merger, emphasizing that the transaction would not change its operational structure or affect competition in the relevant markets. The respondent also highlighted the potential positive impact on production and exports.
05
Court’s reasoning
Legal principles
- 01
Competition Act, 89 of 1998
A merger may be approved if it does not substantially prevent or lessen competition in any relevant market.
- 02
Competition Act, 89 of 1998
Public interest considerations must be assessed in merger proceedings, including the impact on employment, export markets, and the South African economy.
06
Ratio, limits and disposition
Ratio decidendi
The Tribunal found that the transaction merely increases Toyota Motor Corporation's shareholding in Toyota South Africa and does not alter the parties' participation in the relevant product markets. The merger does not affect competition, as Toyota Motor Corporation is not directly active in South Africa except through Toyota South Africa. Furthermore, the transaction does not present any public interest concerns and is likely to have a positive impact by increasing vehicle production and exports from South Africa. Accordingly, the merger was approved without conditions.
Obiter and limits
- The Tribunal noted that the integration of Toyota South Africa into the global network of Toyota Motor Corporation may open new export markets for South African manufactured vehicles.
- No adverse public interest effects were identified; rather, the merger is expected to benefit the South African automotive industry.
Court disposition
Merger approved without conditions.
- The merger between Toyota Motor Corporation (Japan) and Toyota South Africa (Pty) Ltd is approved without conditions.
Source and reliance status
Competition Tribunal
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Judgment reading view
Judgment text
The complete available source text.
Competition Tribunal
Judgment
COMPETITION TRIBUNAL
REPUBLIC OF SOUTH
AFRICA
Case No: 61/LM/Aug02
In the large merger between:
Toyota Motor Corporation (Japan)
and
Toyota South Africa (Pty) Ltd
_______________
Reasons for Decision
Approval
On 23 September 2002 we approved the merger between Toyota Motor Corporation (Japan) and Toyota South Africa (Pty) Ltd, without conditions. Our reasons for this decision are set out below.
The transaction
This is an acquisition by Toyota Motor Corporation (âTMCâ) of 39.3% of the issued share capital in Toyota South Africa (âTSAâ), from Wesco Investments Ltd (âWescoâ). As a result of this acquisition, TMC will become the majority shareholder of TSA.
The primary acquiring firm is TMC, which is listed on various stock exchanges in Japan as well as on the New York and London Stock Exchanges. TMC is the ultimate holding company of the global network of companies within the Toyota Group.
The primary target firm is TSA, which conducts different aspects of its business through various South African subsidiaries.
The merger is intended to ensure TSAâs integration into the global production network of TMC, and it is anticipated that it will expose TSA to previously uncharted export markets.
Evaluating the merger
As the manufacturer of Toyota and Lexus branded vehicles, TMC is the worldâs third largest vehicle manufacturer. However, TMC is not directly active in the South African market and only participates in the market through TSA and its subsidiary, Toyota South Africa Motors (Pty) Ltd (âTSAMâ).
The transaction merely constitutes an increase of TMCâs shareholding in TSA and will not alter TMCâs or TSAâs current mode of participation in the relevant product markets in South Africa.
We agree with the Commissionâs finding that the merger will not affect competition in any of the relevant product markets.
Public interest Issues
The Tribunal is satisfied that the transaction does not present any public interest concerns, rather, it appears that the transaction will have a positive impact through an increase in the production of vehicles in South Africa and the concomitant export thereof.
10 October 2002
N. Manoim Date
Concurring: D. Lewis, P. Maponya
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