On 20 July 2012 the Competition Tribunal (Tribunal) issued
reasons for its unconditional approval of the large merger between
Gas Corporation of South Africa (SOC) Limited (PetroSA), Pioneer
Natural Resources South Africa (Proprietary) Limited (Pioneer SA)
and Petroleum South Cape (Proprietary) Limited (PSC). The merger
was unconditionally approved as a result of substantial competition
in the market.
On 18 July 2012 the Tribunal unconditionally approved the merger between Petroleum Oil and PetroSA and certain offshore oil and gas assets in South Africa, held by Pioneer SA and PSC.
PetroSA, owned by the South African government through the Department of Energy, hoped to increase its shareholding in the assets owned jointly with Pioneer SA and PSC, which are wholly owned by Pioneer Natural Resources USA. Pioneer SA and PSC wanted to divest of the assets and close operations in SA in order to focus on its US onshore assets.
The Commission found a horizontal overlap in the activities of the merging parties but concluded that there is competition from Sasol in the market and that the transaction does not give rise to any anti-competitive concerns. The Commission also found a vertical relationship between the parties, but concluded that PetroSA has a low market share in the downstream market and faces great competition in the market.
The Commission concluded that the merger is not likely to result in any foreclosure or negative public interest concerns. The Tribunal therefore approved the merger unconditionally.
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