Zimco Metals Proprietary Limited and Another v Competition Commission; In re: Zimco Metals Proprietary Limited v Atlantis Metals Proprietary Limited (AME160Oct15) [2016] ZACT 7; [2016] 1 CPLR 114 (CT) (11 February 2016)

Zimco Metals Proprietary Limited and Another v Competition Commission; In re: Zimco Metals Proprietary Limited v Atlantis Metals Proprietary Limited (AME160Oct15) [2016] ZACT 7; [2016] 1 CPLR 114 (CT) (11 February 2016)

The Tribunal found that significant changes in market circumstances, including a decline in commodity prices and the suspension of operations by Atlantis's largest customer, rendered the Atlantis plant economically unviable at its current location. The evidence demonstrated that the anticipated retrenchments were operational and not merger specific. The inability to relocate the plant outside South Africa placed the merging parties at a disadvantage relative to competitors, particularly in the context of increased transport costs and a weakening currency. The Tribunal was satisfied that the conditions for amendment were met and that deletion of the relocation condition was justified. The...

Citation
[2016] ZACT 7
Parties
Applicant: Zimco Metals Proprietary Limited; Applicant: Atlantis Metals Proprietary Limited; Respondent: Competition Commission
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
11 February 2016
Case Number
AME160Oct15
Procedural Posture
Merger Control / Application for Amendment of Merger Conditions
Outcome
Application for amendment of merger conditions granted; condition 3.2 deleted.
Judges
Yasmin Carrim, lmraan Valodia, Andiswa Ndoni
Legal Topics
Merger Control, Removal of Conditions, Market Power, Employment Protection
Competition Law Commercial and Corporate Merger Control Removal of Conditions Market Power Employment Protection

Case Brief

Summary, issues, holding and outcome

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Parties

Zimco Metals Proprietary Limited

Applicant

Atlantis Metals Proprietary Limited

Applicant

Competition Commission

Respondent

Procedural Posture

Merger Control / Application for Amendment of Merger Conditions

Legal Issues

  1. 1 Whether the condition preventing relocation of the Atlantis plant outside South Africa should be deleted.
  2. 2 Whether the anticipated retrenchments are merger specific or operational in nature.
  3. 3 Whether the amendment of merger conditions is justified by changed market circumstances.

Ratio Decidendi

The Tribunal found that significant changes in market circumstances, including a decline in commodity prices and the suspension of operations by Atlantis's largest customer, rendered the Atlantis plant economically unviable at its current location. The evidence demonstrated that the anticipated retrenchments were operational and not merger specific. The inability to relocate the plant outside South Africa placed the merging parties at a disadvantage relative to competitors, particularly in the context of increased transport costs and a weakening currency. The Tribunal was satisfied that the conditions for amendment were met and that deletion of the relocation condition was justified. The...

Court Disposition

Application for amendment of merger conditions granted; condition 3.2 deleted.

Orders

  • Condition 3.2 of the merger conditions is deleted.
  • The conditions to the merger between Zimco Metals Proprietary Limited and Atlantis Metals Proprietary Limited in case number 2014Jul0338 are amended as reflected in Annexure A.