Johnnic Holdings Limited and Fabcos Investment Holding Company Limited (01/LM/Jan05) [2005] ZACT 13 (18 March 2005)

Johnnic Holdings Limited and Fabcos Investment Holding Company Limited (01/LM/Jan05) [2005] ZACT 13 (18 March 2005)

The Tribunal found that the only product and geographic overlap between the merging parties relates to their respective interests in the gaming industry, specifically casino operations in Kwazulu-Natal. Market share data indicated that Tsogo Sun, in which both parties have indirect interests, holds 55% of the market in Kwazulu-Natal, but Johnnic Holdings is not a significant player. Entry barriers are determined by statutory regulation, not by the merger. The transaction does not alter the market structure or increase barriers to entry. No public interest concerns were identified. Accordingly, the merger is unlikely to substantially prevent or lessen competition and raises no public...

Citation
[2005] ZACT 13
Parties
Applicant: Johnnic Holdings Limited; Respondent: Fabcos Investment Holding Company Limited; Respondent: Competition Commission
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
18 March 2005
Case Number
01/LM/Jan05
Procedural Posture
Large Merger Review / Merger Clearance Reasons
Outcome
Merger approved unconditionally.
Judges
Norman Manoim, Yasmin Carrim, Merle Holden
Legal Topics
Large Merger Review, Joint Control, Market Share Analysis, Barriers to Entry, Public Interest, Gaming Industry Regulation
Competition Law Commercial and Corporate Large Merger Review Joint Control Market Share Analysis Barriers to Entry Public Interest Gaming Industry Regulation

Case Brief

Summary, issues, holding and outcome

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Parties

Johnnic Holdings Limited

Applicant

Fabcos Investment Holding Company Limited

Respondent

Competition Commission

Respondent

Procedural Posture

Large Merger Review / Merger Clearance Reasons

Legal Issues

  1. 1 Whether the acquisition by Johnnic Holdings of an additional 25% share in Fabcos Investment Holding Company, resulting in joint control, would substantially prevent or lessen competition in the relevant market.
  2. 2 Whether the transaction raises any public interest concerns that would justify prohibiting or conditioning the merger.

Ratio Decidendi

The Tribunal found that the only product and geographic overlap between the merging parties relates to their respective interests in the gaming industry, specifically casino operations in Kwazulu-Natal. Market share data indicated that Tsogo Sun, in which both parties have indirect interests, holds 55% of the market in Kwazulu-Natal, but Johnnic Holdings is not a significant player. Entry barriers are determined by statutory regulation, not by the merger. The transaction does not alter the market structure or increase barriers to entry. No public interest concerns were identified. Accordingly, the merger is unlikely to substantially prevent or lessen competition and raises no public...

Court Disposition

Merger approved unconditionally.

Orders

  • The merger between Johnnic Holdings Limited and Fabcos Investment Holding Company Limited is approved without conditions.
  • No public interest concerns were found to justify prohibition or conditions.