WBHO Construction (Pty) Ltd v Fikile Construction (Pty) Ltd and Others (LM024Apr17) [2018] ZACT 80; [2018] 1 CPLR 350 (CT) (22 March 2018)

WBHO Construction (Pty) Ltd v Fikile Construction (Pty) Ltd and Others (LM024Apr17) [2018] ZACT 80; [2018] 1 CPLR 350 (CT) (22 March 2018)

The Tribunal found that the proposed merger would not substantially prevent or lessen competition in any relevant market, as the combined market shares post-merger were low and there were numerous competitors. The alliance structure, while creating economic links, was designed to promote transformation and development of historically disadvantaged contractors, in line with public interest objectives. The Tribunal imposed conditions to ensure equal treatment of Emerging Contractors and to prevent anti-competitive information sharing through the Fund, requiring annual reporting and safeguards on trustee appointments. The merger was approved subject to these conditions, as the public...

Citation
[2018] ZACT 80
Parties
Applicant: WBHO Construction (Pty) Ltd; Respondent: Fikile Construction (Pty) Ltd; Respondent: Edwin Construction (Pty) Ltd; Respondent: Motheo Construction Group (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
22 March 2018
Case Number
LM024Apr17
Procedural Posture
Merger Application / Tribunal Approval With Conditions
Outcome
Merger conditionally approved subject to specified public interest and competition safeguards.
Judges
Yasmin Carrim, AW Wessels, Medi Mokuena
Legal Topics
Merger Control, Public Interest Benefits, Broad Based Black Economic Empowerment, Market Power, Information Sharing Safeguards
Competition Law Commercial and Corporate Merger Control Public Interest Benefits Broad Based Black Economic Empowerment Market Power Information Sharing Safeguards

Case Brief

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Parties

WBHO Construction (Pty) Ltd

Applicant

Fikile Construction (Pty) Ltd

Respondent

Edwin Construction (Pty) Ltd

Respondent

Motheo Construction Group (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Tribunal Approval With Conditions

Legal Issues

  1. 1 Whether the proposed merger would substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the merger would result in public interest benefits, particularly for historically disadvantaged persons.
  3. 3 Whether the structure and operation of the alliance and the Fund could facilitate anti-competitive information sharing.

Ratio Decidendi

The Tribunal found that the proposed merger would not substantially prevent or lessen competition in any relevant market, as the combined market shares post-merger were low and there were numerous competitors. The alliance structure, while creating economic links, was designed to promote transformation and development of historically disadvantaged contractors, in line with public interest objectives. The Tribunal imposed conditions to ensure equal treatment of Emerging Contractors and to prevent anti-competitive information sharing through the Fund, requiring annual reporting and safeguards on trustee appointments. The merger was approved subject to these conditions, as the public...

Court Disposition

Merger conditionally approved subject to specified public interest and competition safeguards.

Orders

  • The merger is approved subject to conditions set out in Annexure A.
  • The Emerging Contractors must be treated equally in the allocation of work within the alliance.