High Court overturns Competition Authority decision
Staff Writer | Tuesday September 26, 2017 18:00
The Authority had disapproved the merger on the grounds that there were competition and public interest concerns that arose in the line haul transportation services market on account of the acquisition in Botswana.
The Authority had further indicated that it took cognisance of the fact that the proposed transaction was likely to result in reduced competition due to the removal of a competitor in the line of haul transportation services market.
Also, the Authority had said the implementation of the proposed merger was expected to result in the merged entity attaining a dominant position, and that the proposed transaction would result in retrenchments and citizen disempowerment.
Given the competition and public interest concerns identified in the aforementioned transaction, and the fact that Transport Holdings, owned 80% by Imperial Holding Group of South Africa, is the only other entity apart from 4MS having a contract with Kgalagadi Breweries Limited (KBL) that expires in January 2020.
Transport Holdings or any other entity related in anyway with Transport Holdings was restrained from participating in the tender to be issued by KBL upon the expiry of the existing 4MS contract with KBL in October 2017, and for the entire period leading up to the end of the Transport Holdings contract in January 2020, including any extension period that may be granted thereafter.
However, a notice from the Authority this week stated that following the decision, the merging parties lodged an application for the judicial review of the decision of the Authority with the High Court. According to CA, the parties and the Authority then determined to engage in negotiations to reach an amicable settlement of the matter.
“Through these discussions, it was agreed and subsequently confirmed by order of the High Court dated July 5, 2017 that Transport Holdings is not precluded by the Authority from participating in the tender to be issued by KBL when 4MS’ contract with KBL comes to an end,” read the notice.
The court also ordered that Transport Holdings shall be entitled to submit a merger notification for consideration by the Authority in respect of any new notifiable transaction it may conclude with 4MS in terms of the Competition Act.
The High Court therefore ordered for the revision of the Authority’s decision.