TWK Agri Proprietary Limited v BedRock Mining Support Limited (LM207Jan17) [2017] ZACT 41; [2017] 1 CPLR 416 (CT) (25 May 2017)

TWK Agri Proprietary Limited v BedRock Mining Support Limited (LM207Jan17) [2017] ZACT 41; [2017] 1 CPLR 416 (CT) (25 May 2017)

The Tribunal found that the proposed merger between TWK Agri and BedRock is a vertical transaction involving the upstream supply of timber and the downstream manufacture of timber-based mining support products. TWK Agri holds a minor share of the upstream timber market and is not in a position to exercise market power or implement an effective input foreclosure strategy. BedRock's long-term supply agreement with MTO Forestry further mitigates customer foreclosure risks. The Commission's investigation revealed no substantial competition concerns or adverse public interest effects, including employment. The Tribunal concurred with the Commission's findings and approved the merger...

Citation
[2017] ZACT 41
Parties
Applicant: TWK Agri Proprietary Limited; Respondent: BedRock Mining Support Proprietary Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
25 May 2017
Case Number
LM207Jan17
Procedural Posture
Merger Review / Final Determination
Outcome
Merger approved unconditionally.
Judges
Medi Mokuena, Andiswa Ndoni, Fiona Tregenna
Legal Topics
Vertical Merger, Input Foreclosure, Customer Foreclosure, Public Interest, Timber Market, Mining Support Products
Competition Law Commercial and Corporate Vertical Merger Input Foreclosure Customer Foreclosure Public Interest Timber Market Mining Support Products

Case Brief

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Parties

TWK Agri Proprietary Limited

Applicant

BedRock Mining Support Proprietary Limited

Respondent

Procedural Posture

Merger Review / Final Determination

Legal Issues

  1. 1 Whether the proposed merger between TWK Agri and BedRock is likely to substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the transaction raises concerns of input or customer foreclosure.
  3. 3 Whether the transaction raises any adverse public interest issues, including effects on employment.

Ratio Decidendi

The Tribunal found that the proposed merger between TWK Agri and BedRock is a vertical transaction involving the upstream supply of timber and the downstream manufacture of timber-based mining support products. TWK Agri holds a minor share of the upstream timber market and is not in a position to exercise market power or implement an effective input foreclosure strategy. BedRock's long-term supply agreement with MTO Forestry further mitigates customer foreclosure risks. The Commission's investigation revealed no substantial competition concerns or adverse public interest effects, including employment. The Tribunal concurred with the Commission's findings and approved the merger...

Court Disposition

Merger approved unconditionally.

Orders

  • The large merger between TWK Agri Proprietary Limited and BedRock Mining Support Proprietary Limited is approved unconditionally.