On 5 November 2012 the Competition Tribunal provided its reasons for approving, with conditions, the acquisition of ArcelorMittal South Africa's (AMSA) interests in the entities that constitute the Scaw Group (including Scaw South Africa and Consolidated Wire Industries). The Industrial Development Corporation of SA acquired these interests, as well as Anglo American's interests in a number of foreign entities in terms of which Scaw South Africa has management control.
Although there were no direct horizontal overlaps between the activities of the parties, the Competition Commission was concerned about the IDC's shareholding in AMSA. The latter resulted in an indirect horizontal overlap as the activities of Scaw and AMSA coincide with respect to the upstream manufacturing and distribution of long steel products. The Commission found that there were no likely adverse unilateral effects arising from the proposed transaction. In addition, the Commission found that it was unlikely that the proposed transaction would lead to vertical foreclosure concerns. Given the IDC's shareholding in both firms, the Commission was concerned about post-merger information exchange between Scaw and AMSA. The Tribunal agreed with the Commission that the proposed transaction was likely to facilitate the exchange of information between Scaw and AMSA, and accordingly imposed behavioural conditions. The Tribunal ordered that:
- there may be no cross-directorship by IDC-appointed directors in Scaw and AMSA
- the sharing of competitively sensitive, non-public information in respect of Scaw and AMSA does not take place between the management teams responsible for interests within the IDC; and
- the IDC is to develop and implement a policy to ensure that the sharing of competitively sensitive, non-public information does not take place.
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