Used Equipment Company (Pty) Ltd and Barloworld Equipment (Pty) Ltd and BLC Plant Company (Pty) Ltd (20/LM/Apr03) [2003] ZACT 29 (4 June 2003)

Used Equipment Company (Pty) Ltd and Barloworld Equipment (Pty) Ltd and BLC Plant Company (Pty) Ltd (20/LM/Apr03) [2003] ZACT 29 (4 June 2003)

The Tribunal found that the joint venture between Barloworld Equipment and BLC Plant Company, forming the Used Equipment Company, would not substantially lessen competition in the market for used earthmoving equipment. The product overlap was limited to the purchase and sale of used equipment, and the market was characterized by low entry barriers and significant customer countervailing power. The geographic market was defined as national, and the parties' combined market shares did not raise competition concerns. No public interest issues were identified that would alter this conclusion. Accordingly, the merger was approved unconditionally.

Citation
[2003] ZACT 29
Parties
Applicant: Used Equipment Company (Pty) Ltd; Respondent: Barloworld Equipment (Pty) Ltd; Respondent: BLC Plant Company (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
4 June 2003
Case Number
20/LM/Apr03
Procedural Posture
Large Merger / Merger Approval
Outcome
Merger approved unconditionally.
Judges
D. Lewis, U. Bhoola, L. Reyburn
Legal Topics
Merger Clearance, Market Definition, Entry Barriers, Public Interest, Joint Venture
Competition Law Commercial and Corporate Merger Clearance Market Definition Entry Barriers Public Interest Joint Venture

Case Brief

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Parties

Used Equipment Company (Pty) Ltd

Applicant

Barloworld Equipment (Pty) Ltd

Respondent

BLC Plant Company (Pty) Ltd

Respondent

Procedural Posture

Large Merger / Merger Approval

Legal Issues

  1. 1 Whether the proposed joint venture will substantially lessen competition in the market for used earthmoving equipment.
  2. 2 Whether there are public interest concerns that would prevent approval of the merger.

Ratio Decidendi

The Tribunal found that the joint venture between Barloworld Equipment and BLC Plant Company, forming the Used Equipment Company, would not substantially lessen competition in the market for used earthmoving equipment. The product overlap was limited to the purchase and sale of used equipment, and the market was characterized by low entry barriers and significant customer countervailing power. The geographic market was defined as national, and the parties' combined market shares did not raise competition concerns. No public interest issues were identified that would alter this conclusion. Accordingly, the merger was approved unconditionally.

Court Disposition

Merger approved unconditionally.

Orders

  • The merger between Used Equipment Company (Pty) Ltd, Barloworld Equipment (Pty) Ltd, and BLC Plant Company (Pty) Ltd is approved without conditions.