Wispeco (Pty) Ltd v The Sheerline Business of AGI Solutions (Pty) Ltd (69/LM/Oct09) [2010] ZACT 35 (20 May 2010)

Wispeco (Pty) Ltd v The Sheerline Business of AGI Solutions (Pty) Ltd (69/LM/Oct09) [2010] ZACT 35 (20 May 2010)

The Tribunal found that although the merger would increase concentration in the stockist market for aluminium products, Sheerline's weakened competitive position meant that its acquisition by Wispeco would not substantially lessen competition. Other vertically integrated firms and import competition would continue to constrain the merged entity. The Tribunal also determined that the merger would not facilitate coordinated conduct at the extruder level, nor would it result in input or customer foreclosure, given the presence of alternative suppliers. On the public interest issue, the Tribunal held that while consultation with NUMSA was inadequate, the financial distress of Sheerline...

Citation
[2010] ZACT 35
Parties
Applicant: Wispeco (Pty) Ltd; Respondent: The Sheerline Business of AGI Solutions (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
20 May 2010
Case Number
69/LM/Oct09
Procedural Posture
Merger Application / Reasons for Decision After Approval With Conditions
Outcome
Merger approved subject to conditions.
Judges
N Manoim, Y Carrim, M Holden
Legal Topics
Horizontal Merger, Vertical Integration, Public Interest Employment, Market Definition, Unilateral Effects, Coordinated Effects
Competition Law Commercial and Corporate Horizontal Merger Vertical Integration Public Interest Employment Market Definition Unilateral Effects Coordinated Effects

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 1 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Parties

Wispeco (Pty) Ltd

Applicant

The Sheerline Business of AGI Solutions (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Reasons for Decision After Approval With Conditions

Legal Issues

  1. 1 Whether the proposed merger between Wispeco and Sheerline is likely to substantially prevent or lessen competition in the relevant markets.
  2. 2 Whether the merger raises public interest concerns, specifically regarding employment and consultation with trade unions.
  3. 3 Whether the merger would facilitate coordinated conduct or input/customer foreclosure in the aluminium supply chain.

Ratio Decidendi

The Tribunal found that although the merger would increase concentration in the stockist market for aluminium products, Sheerline's weakened competitive position meant that its acquisition by Wispeco would not substantially lessen competition. Other vertically integrated firms and import competition would continue to constrain the merged entity. The Tribunal also determined that the merger would not facilitate coordinated conduct at the extruder level, nor would it result in input or customer foreclosure, given the presence of alternative suppliers. On the public interest issue, the Tribunal held that while consultation with NUMSA was inadequate, the financial distress of Sheerline...

Court Disposition

Merger approved subject to conditions.

Orders

  • For a period of one year after the date of this order, the merged entity may not make any merger-related retrenchments at the target firm, provided that this will not prevent the merged firm making operationally related retrenchments at the target firm during this period.
  • During the one year period, the merged entity must notify the Competition Commission of any retrenchments taking place at the target firm within 20 days of the retrenchment being notified to the employee/s concerned. The notification to the Commission must include the number of employees retrenched and the reasons...