Trufit (Pty) Ltd and Cobra Group (Pty) Ltd (17/LM/Apr03) [2003] ZACT 35 (12 June 2003)

Trufit (Pty) Ltd and Cobra Group (Pty) Ltd (17/LM/Apr03) [2003] ZACT 35 (12 June 2003)

The Tribunal found that there is no product overlap or vertical relationship between Trufit and Cobra Group, and that Trufit is a newly formed company with no activity in the relevant market. The controlling shareholders of Trufit do not operate in the market in which Cobra is active. The merger does not result in a change in market structure, and Cobra will not exit the market. The parties intend to retain all current employees, so there are no negative public interest concerns. Accordingly, the merger will not lead to a substantial lessening of competition and is unconditionally approved.

Citation
[2003] ZACT 35
Parties
Applicant: Trufit (Pty) Ltd; Respondent: Cobra Group (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
12 June 2003
Case Number
17/LM/Apr03
Procedural Posture
Large Merger Review / Merger Clearance
Outcome
Merger unconditionally approved.
Judges
D. Lewis, U. Bhoola, L. Reyburn
Legal Topics
Large Merger, Market Definition, Public Interest, Employment Effects
Competition Law Large Merger Market Definition Public Interest Employment Effects

Case Brief

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Parties

Trufit (Pty) Ltd

Applicant

Cobra Group (Pty) Ltd

Respondent

Procedural Posture

Large Merger Review / Merger Clearance

Legal Issues

  1. 1 Whether the proposed merger between Trufit and Cobra Group would substantially lessen competition in the relevant market.
  2. 2 Whether the transaction raises any public interest concerns, including employment effects.

Ratio Decidendi

The Tribunal found that there is no product overlap or vertical relationship between Trufit and Cobra Group, and that Trufit is a newly formed company with no activity in the relevant market. The controlling shareholders of Trufit do not operate in the market in which Cobra is active. The merger does not result in a change in market structure, and Cobra will not exit the market. The parties intend to retain all current employees, so there are no negative public interest concerns. Accordingly, the merger will not lead to a substantial lessening of competition and is unconditionally approved.

Court Disposition

Merger unconditionally approved.

Orders

  • The merger between Trufit (Pty) Ltd and Cobra Group (Pty) Ltd is approved without conditions.
  • A Merger Clearance Certificate is issued in terms of section 16(2)(a) of the Competition Act.