WBHO Industrial Holdings (Pty) Ltd v Capital Africa Steel (Pty) Ltd (016733) [2013] ZACT 90 (19 August 2013)

WBHO Industrial Holdings (Pty) Ltd v Capital Africa Steel (Pty) Ltd (016733) [2013] ZACT 90 (19 August 2013)

The Tribunal found that the proposed transaction, which results in WBHO Industrial acquiring sole control of CAS, does not give rise to any horizontal overlap as the parties do not supply substitutable products. The vertical relationship, where CAS supplies construction materials to WBHO, was found not to raise foreclosure concerns due to the availability of alternative suppliers and the lack of objections from market participants. Although both WBHO and CAS have histories of cartel conduct, the transaction was specifically designed to address competition concerns arising from cross-directorships and information sharing, and is unlikely to facilitate coordinated effects. The Tribunal also...

Citation
[2013] ZACT 90
Parties
Applicant: WBHO Industrial Holdings (Pty) Ltd; Applicant: The Brait Entities; Respondent: Capital Africa Steel (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
19 August 2013
Case Number
016733
Procedural Posture
Merger Approval / Final Determination
Outcome
Merger approved unconditionally.
Judges
Andreas Wessels, Anton Roskam, Mondo Mazwai
Legal Topics
Merger Control, Joint to Sole Control, Vertical Relationships, Cartel History, Public Interest Employment
Competition Law Commercial and Corporate Merger Control Joint to Sole Control Vertical Relationships Cartel History Public Interest Employment

Case Brief

Summary, issues, holding and outcome

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Parties

WBHO Industrial Holdings (Pty) Ltd

Applicant

The Brait Entities

Applicant

Capital Africa Steel (Pty) Ltd

Respondent

Procedural Posture

Merger Approval / Final Determination

Legal Issues

  1. 1 Whether the proposed transaction will substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the transaction raises any public interest concerns, including employment effects.
  3. 3 Whether the change from joint to sole control of CAS could facilitate coordinated effects or collusion.

Ratio Decidendi

The Tribunal found that the proposed transaction, which results in WBHO Industrial acquiring sole control of CAS, does not give rise to any horizontal overlap as the parties do not supply substitutable products. The vertical relationship, where CAS supplies construction materials to WBHO, was found not to raise foreclosure concerns due to the availability of alternative suppliers and the lack of objections from market participants. Although both WBHO and CAS have histories of cartel conduct, the transaction was specifically designed to address competition concerns arising from cross-directorships and information sharing, and is unlikely to facilitate coordinated effects. The Tribunal also...

Court Disposition

Merger approved unconditionally.

Orders

  • The proposed transaction is approved unconditionally.
  • No conditions are imposed on the parties.