Actom (Pty) Ltd v Savcio Holdings (Pty) Ltd (70/LM/Aug11) [2012] ZACT 35; [2012] 2 CPLR 409 (CT) (8 May 2012)

Actom (Pty) Ltd v Savcio Holdings (Pty) Ltd (70/LM/Aug11) [2012] ZACT 35; [2012] 2 CPLR 409 (CT) (8 May 2012)

The Tribunal found that the proposed merger would result in the merged entity becoming the largest supplier of commutators in South Africa, raising concerns about market power and the ability to control prices. However, Savcio was not a significant player in the commutator market, and credible threats of entry or self-supply by customers such as TRE existed. The Tribunal concluded that the competition concerns could be adequately addressed by imposing behavioural conditions, including obligations to continue supplying commutators and copper wire products at market-related prices for specified periods, removal of cross-directorships to prevent collusion, and monitoring requirements. The...

Citation
[2012] ZACT 35
Parties
Applicant: Actom (Pty) Ltd; Respondent: Savcio Holdings (Pty) Ltd; Respondent: Transnet Rail Engineering (TRE); Respondent: Competition Commission
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
8 May 2012
Case Number
70/LM/Aug11
Procedural Posture
Large Merger Application / Conditional Approval With Reasons
Outcome
Merger conditionally approved subject to behavioural conditions.
Judges
Yasmin Carrim, Andreas Wessels, Takalani Madima
Legal Topics
Merger Control, Behavioural Conditions, Vertical and Horizontal Overlap, Market Power, Public Interest
Competition Law Commercial and Corporate Merger Control Behavioural Conditions Vertical and Horizontal Overlap Market Power Public Interest

Case Brief

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Parties

Actom (Pty) Ltd

Applicant

Savcio Holdings (Pty) Ltd

Respondent

Transnet Rail Engineering (TRE)

Respondent

Competition Commission

Respondent

Procedural Posture

Large Merger Application / Conditional Approval With Reasons

Legal Issues

  1. 1 Whether the proposed merger between Actom and Savcio is likely to substantially prevent or lessen competition in relevant markets.
  2. 2 Whether behavioural conditions can address competition concerns arising from the merger.
  3. 3 Whether the merger raises any public interest concerns, including effects on employment.

Ratio Decidendi

The Tribunal found that the proposed merger would result in the merged entity becoming the largest supplier of commutators in South Africa, raising concerns about market power and the ability to control prices. However, Savcio was not a significant player in the commutator market, and credible threats of entry or self-supply by customers such as TRE existed. The Tribunal concluded that the competition concerns could be adequately addressed by imposing behavioural conditions, including obligations to continue supplying commutators and copper wire products at market-related prices for specified periods, removal of cross-directorships to prevent collusion, and monitoring requirements. The...

Court Disposition

Merger conditionally approved subject to behavioural conditions.

Orders

  • All common directors between Acton Repair Services (Pty) Ltd and Actom have been removed and no common directors shall be appointed in future while Actom controls Savcio.
  • The merged entity must annually submit an affidavit confirming compliance with the cross-directorship condition, with the first affidavit due on 1 April 2013.