Unilever Plc and Unilever N.V v Sara Lee Corporation (14/LM/MAR10) [2010] ZACT 86; [2010] 2 CPLR 380 (CT) (7 December 2010)

Unilever Plc and Unilever N.V v Sara Lee Corporation (14/LM/MAR10) [2010] ZACT 86; [2010] 2 CPLR 380 (CT) (7 December 2010)

The Tribunal found that the merger would likely result in a substantial lessening of competition in the national deodorant market, as Unilever and Sara Lee's brands compete closely and would hold a significant combined market share post-merger. Barriers to entry for new competitors are high, and the removal of Status as an independent competitor would reduce innovation and consumer choice. The Tribunal determined that divestiture of the Status brand to an independent third party, subject to approval and monitoring, would remedy the anti-competitive effects. Additionally, the Tribunal imposed a condition limiting dismissals to a maximum of 60 employees and required Unilever to provide...

Citation
[2010] ZACT 86
Parties
Applicant: Unilever Plc and Unilever N.V.; Respondent: Sara Lee Corporation; Respondent: Competition Commission; Respondent: CEPPWAWU (Union)
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
7 December 2010
Case Number
14/LM/MAR10
Procedural Posture
Merger Application / Reasons for Conditional Approval of Merger
Outcome
Merger conditionally approved subject to divestiture and employment conditions.
Judges
Yasmin Carrim, Andreas Wessels, Andiswa Ndoni
Legal Topics
Merger Control, Divestiture Conditions, Public Interest Employment, Substantial Lessening of Competition
Competition Law Merger Control Divestiture Conditions Public Interest Employment Substantial Lessening of Competition

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 3 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Parties

Unilever Plc and Unilever N.V.

Applicant

Sara Lee Corporation

Respondent

Competition Commission

Respondent

CEPPWAWU (Union)

Respondent

Procedural Posture

Merger Application / Reasons for Conditional Approval of Merger

Legal Issues

  1. 1 Whether the proposed merger between Unilever and Sara Lee will substantially prevent or lessen competition in the deodorant market.
  2. 2 Whether divestiture of the Status brand is sufficient to remedy anti-competitive effects.
  3. 3 Whether the merger raises public interest concerns regarding employment and if conditions should be imposed.

Ratio Decidendi

The Tribunal found that the merger would likely result in a substantial lessening of competition in the national deodorant market, as Unilever and Sara Lee's brands compete closely and would hold a significant combined market share post-merger. Barriers to entry for new competitors are high, and the removal of Status as an independent competitor would reduce innovation and consumer choice. The Tribunal determined that divestiture of the Status brand to an independent third party, subject to approval and monitoring, would remedy the anti-competitive effects. Additionally, the Tribunal imposed a condition limiting dismissals to a maximum of 60 employees and required Unilever to provide...

Court Disposition

Merger conditionally approved subject to divestiture and employment conditions.

Orders

  • The merging parties shall dispose of the business identified as the 'divested business' (Status brand) to a buyer approved by the Commission in accordance with the Divestiture Conditions and Trustee Mandate.
  • Unilever SA shall limit the number of employees dismissed in South Africa as a result of the merger to a maximum of 60 employees.