South Africa: The Merger Control Review - South Africa (Third Edition)

Last Updated: 14 December 2012
Most Read Contributor in South Africa, September 2018

Authors: Lee Mendelsohn and Amy van Buuren1

I INTRODUCTION

Since the promulgation of the Competition Act, 89 of 1998 ('the Competition Act'), and its coming into effect in September 1999, mergers (defined as the acquisition or establishment of control by one or more firms over the whole or part of the business of another firm) that meet the prescribed monetary thresholds must be notified to and approved by the South African competition authorities before they may be implemented.

South African merger control has developed in leaps and bounds in sophistication, and international trends and norms are very closely ascribed to by the South African competition regulators. That said, South African merger control is also uniquely South African, in that analysis of both classic competition issues (the negative effect of a transaction on competitive conditions weighed against the efficiencies arising therefrom) and public interest issues (notably the impact of a transaction on employment) are called for by the statute.

Merger review under the Competition Act requires the assessment of whether:

a the merger is likely to lead to a substantial prevention or lessening of competition;

b there are efficiencies that outweigh the anti-competitive effects of the merger (where this has been found); and

c the merger can or cannot be allowed on public interest grounds.

In assessing whether a transaction is likely to lead to a substantial prevention or lessening of competition, the Competition Commission ('the Commission') will assess the strength of competition in the relevant markets as defined, and the probability that the firms in the market will behave competitively or cooperatively following the proposed transaction, taking into account any factor that is relevant to competition in that market, including:

a the actual and potential level of import competition in the market;

b the ease of entry into the market, including tariff and regulatory barriers;

c the level and trends of concentration, and history of collusion, in the market;

d the degree of countervailing power in the market;

e the dynamic characteristics of the market, including growth, innovation, and product differentiation;

f the nature and extent of vertical integration in the market;

g whether the business or part of the business of a party to the proposed transaction has failed or is likely to fail; and

h whether the proposed transaction will result in the removal of an effective competitor.

If it appears that the proposed transaction is likely to substantially prevent or lessen competition, the Commission must then determine whether the proposed transaction is likely to result in any technological, efficiency or other pro-competitive gain, which will be greater than or offset such anti-competitive effects that will result or are likely to result from the proposed transaction, and would not likely occur if the proposed transaction were prevented.

Irrespective of the outcomes of the above analyses, the effect of the transaction on the public interest must be analysed on a stand-alone basis, such that an anti-competitive merger can be approved and a pro-competitive merger may be prohibited on the basis of such public interest issues. The Commission must therefore determine whether the proposed transaction can or cannot be justified on substantial public interest grounds by assessing the effect the proposed transaction will have on:

a a particular industrial sector or region;

b employment;

c the ability of small business, or firms controlled by historically disadvantaged persons, to become competitive; and

d the ability of national industries to compete in international markets.

II YEAR IN REVIEW

Since about July 2011 to date, the Commission has investigated approximately nine small mergers, 126 intermediate mergers and 67 large mergers. Comparing this with the position in the previous year, according to the Commission's annual report for 2010/2011, the number of mergers referred to the Commission for consideration remained relatively static, with just over 200 mergers being considered this year compared with the228 considered in the previous year. In the previous year, there were 19 small mergers, 150 intermediate and 60 large mergers.

While there were substantially the same number of notified mergers, the approach of the competition authorities thereto appears to have shifted fairly significantly during the year under review. In this regard, the authorities have been far more stringent in their analysis of and decisions pertaining to the mergers before them in this year. The competition authorities have prohibited more than six mergers for various reasons. For instance, the Commission prohibited two mergers in the horseracing industry, one in the knock-and-drop leaflet distribution market, one in the chemicals industry and recommended the prohibition of a large merger in the health-care sector to the Tribunal. This spate of prohibitions is more than triple the number during the previous year. In addition, in comparison to the 14 mergers that were conditionally approved during 2010 and 2011, this year saw approximately 26 mergers being approved subject to conditions.

The hard-line approach of the authorities has resulted in numerous challenges by merging parties. Of particular interest, and as is discussed more fully below, such challenges have included (1) the request by Kansai and Freeworld for the Tribunal to reconsider the conditions attached by the Commission to its approval of the intermediate merger between such parties; (2) the overturning of the prohibition of the intermediate merger between Pioneer and Pannar by the Competition Appeal Court; and (3) the consideration of the Walmart/Massmart decision by the Competition Appeal Court.

i Kansai/Freeworld

In this case,2 Kansai, a public company incorporated in Japan and listed on the Osaka and Tokyo stock exchanges sought to acquire control (by means of a hostile takeover) of Freeworld, a public company listed on the Johannesburg Stock Exchange. Pursuant to its consideration of the proposed merger, the Commission imposed certain conditions to its approval: (1) the divestiture by the merged entity of Freeworld's entire automotive coatings business; (2) a moratorium on retrenchments for a period of three years; (3) the establishment by Kansai of an automotive manufacturing facility in South Africa within five years with a concomitant undertaking to continue manufacturing decorative coatings for a period of 10 years; (4) an obligation on Kansai to invest in South African research and development in decorative coatings; and (5) the implementation by Kansai of a BEE transaction within two years.

It was alleged by the Commission that such conditions were necessary to address both competitive and public interest considerations, since each of the merging parties was found to be active in the market for the supply of automotive coatings. Furthermore, the Commission announced that these conditions would serve to increase South Africa's manufacturing capacity in the paint market.

Kansai made an application to the Tribunal to reconsider the conditions imposed by the Commission, in particular the condition pertaining to the divestiture of Freeworld's automotive coatings business. Pursuant to the application for reconsideration, the Commission filed a revised set of conditions (which had been developed subsequent to considered negotiations between the Commission and Kansai) in terms of which the divestiture condition was withdrawn and replaced with an obligation on the merged entity to manufacture locally. The revised set of conditions further sought to limit the extent of information exchanged between Kansai and DuPont, the latter of which was a joint venture partner of Freeworld prior to the merger and a competitor to Kansai in the relevant market.

The Tribunal considered this matter in its entirety and found that the withdrawal of the divestiture condition was appropriate in the circumstances, since an analysis of the relevant industry revealed the divestiture condition to be unwarranted. While it did not reach a decision as to the appropriateness of the remaining conditions (since such conditions were the result of negotiations between the Commission and Kansai), the Tribunal noted that such conditions appeared to adequately address the potential concern of information flow between competitors.

On this basis, it would appear that the Tribunal serves as a regulatory touchstone to ensure that the conditions imposed by the Commission are not too stringent and appropriately address a properly conceived theory of harm that may arise pursuant to the implementation of a merger.

ii Pioneer/Pannar Seed and the Commission

During 2010, the Commission was requested to consider a merger between Pioneer Hi-Bred International Inc and Pannar Seed (Proprietary) Limited.

The Commission ultimately prohibited the proposed transaction on the grounds that the merger was likely to substantially prevent or lessen competition in the maize seed market in South Africa. While the Commission accepted that the merger was likely to give rise to certain pro-competitive, efficiency and technological gains, it concluded that such resultant gains would be insufficient to counter the anti-competitive effect likely to eventuate as a result of the proposed transaction.

The merging parties made an application to the Tribunal to reconsider the Commission's decision to prohibit the proposed transaction. Pursuant to its analysis, the Tribunal confirmed the decision of the Commission, and prohibited the proposed transaction on the grounds that its implementation would not be in the best interests of South African maize farmers and consumers of maize products, since it was likely to result in a substantial prevention or lessening of competition in the relevant maize seed markets.

Still unsatisfied, the merging parties appealed against the decision of the Tribunal to the Competition Appeal Court ('the CAC'), where the matter was addressed in early 2012.3 While the CAC acknowledged that the proposed transaction would reduce the number of participants in the hybrid seed market from three to two, it considered the potential resultant benefits of the proposed transaction. In particular, the CAC placed heavy reliance on the fact that the prohibition of the merger would result in the loss of the valuable local germplasm of Pannar which, if preserved, could be effectively exploited to the benefit of public interest, with particular benefit as regards technological and innovative developments in the relevant market. Moreover, the CAC held that the prohibition of the merger (on the basis that the participants in the relevant market would be reduced from three to two) would be likely to serve little purpose, since Pannar's continued decline and eventual demise would result in it exiting the relevant market as a competitor in any event. On this basis, the CAC set aside the decision of the Tribunal and approved the proposed transaction, subject to conditions intended to promote the ability of small businesses owned or controlled by historically disadvantaged persons to become competitive and further, to endorse research and development in the relevant industry in South Africa.

iii Walmart/Massmart

While the transaction between Wal-Mart Stores Inc of the United States ('Walmart') and South African retailer Massmart Holdings Limited ('Massmart') was conditionally approved by the Tribunal during May 2011,4 the debate regarding its permissibility, from a South African competition law perspective nonetheless continued. While the merging parties initially sought the unconditional approval of the proposed transaction (which transaction was widely accepted to yield no competition law concern), the Tribunal opted to impose conditions (offered voluntarily by the merging parties) to its approval intended to protect certain specified public interest considerations, in particular employment and the ability of small, historically disadvantaged businesses to compete effectively.

Notwithstanding the decision of the Tribunal, which included conditions deemed to adequately address the potential impact on the aforementioned public interest considerations, SACCAWU, a trade union that had originally intervened in the Tribunal proceedings, sought and was granted leave to appeal the decision of the Tribunal to the CAC on the basis that the merger would be to the detriment of public interest and the Ministers of Economic Development, Trade and Industry and Agriculture, Forestry and Fisheries (collectively 'the Ministers') sought to review and set aside the decision of the Tribunal.

During the hearing, the Ministers raised various arguments, inter alia, pertaining to the fairness of the trial before the Tribunal, especially considering the Tribunal's (allegedly unwarranted) refusal to order the merging parties to discover a range of documents that had been sought by them, as well as certain of the Tribunal's scheduling decisions regarding the oral hearings.

It was held by the CAC that the appropriate test in assessing arguments of this nature was not to replace the decision of the Tribunal with that which it would have made, but rather to consider, in light of various extenuating circumstances faced by the Tribunal (including its mandate, caseload, expertise and resources) what a reasonable decision-maker would have done. On this basis, the CAC found no grounds to question the scheduling and discovery decisions made by the Tribunal during the hearing before it. It thus concluded that neither of the arguments raised by the Ministers could justify the setting aside of the Tribunal's decision to conditionally approve the merger.

In its consideration of the appeal, the CAC indicated that the arguments raised by SACCAWU were insufficient to require the prohibition of the merger. While it was unable to conclude with a degree of precision the public interest benefits to which the merger would give rise, it stated that the pro-competitive benefits likely to result from the merger would countervail any alleged anti-competitive effect thereof. Notwithstanding the foregoing, the CAC required the merging parties to reinstate 503 employees, which SACCAWU had argued were retrenched to incentivise the conclusion of the merger. In addition, the CAC requested greater clarity from the merging parties pertaining to the establishment and development of a programme to support local South African suppliers.

In conclusion, the year under review has revealed the stance of the competition authorities (from a merger perspective) to be one of stringent enforcement with due regard to both public interest and competitive considerations. While the decisions of the authorities may appear to be more severe than those seen historically (as evidenced by the increased numbers of prohibitions and conditional approvals), it is clear that the multi-tiered structure of the agencies vested with merger decision-making power plays a vital role in ensuring that decisions are sound for the benefit of the merging parties, competitiveness of the market in general and, therefore, the efficient operation of the South African economy.

III THE MERGER CONTROL REGIME

In order to determine whether a transaction is notifiable to the competition authorities in South Africa, it must be established whether:

a the competition authorities have jurisdiction over the proposed transaction;

b the proposed transaction comprises a 'merger' as defined in Section 12 of the Competition Act, No. 89 of 1998 (as amended) ('the Competition Act'); and

c the proposed transaction meets the merger thresholds, as contemplated in the Competition Act and the regulations promulgated thereunder (Government Notice 254 of 2001).

i Jurisdiction

The point of departure when assessing the impact of South African competition law on a particular transaction is to establish whether the transaction in question falls within the jurisdiction of the South African competition authorities. In terms of Section 3(1) of the Competition Act, the provisions thereof apply to all economic activity 'within, or having an effect within' the Republic of South Africa.

ii The definition of a merger

The Competition Act defines a 'merger' as the direct or indirect acquisition or establishment of direct or indirect control, by one or more firms, over the whole or part of the business of another firm.

iii Merger thresholds

In the event that the South African competition authorities enjoy jurisdiction and the transaction satisfies the definition of a 'merger' as set out in the Section 12 of the Competition Act, one must then establish whether the transaction in question constitutes a small, intermediate or large merger. Large and intermediate transactions require mandatory notification and approval from the competition authorities prior to their implementation. A small merger is only notifiable in the event that the Commission requires it to be notified.

Small mergers are those mergers where the combined annual turnover or assets (whichever is greater) in, into, or from South Africa of the acquiring firms and the target firms is valued below 560 million rand and the annual turnover or assets (whichever is greater) in, into, or from South Africa of the target firm is below 80 million rand.

Intermediate mergers are defined as those mergers where the combined annual turnover or assets (whichever is greater) in, into or from South Africa of the acquiring firms and the target firms is valued at or above 560 million rand and the annual turnover or assets (whichever is greater) in, into, or from South Africa of the target firm is valued at or above 80 million rand.

Large mergers are defined as mergers where the combined turnover or assets (whichever is greater) in, into, or from South Africa, of the acquiring firms and the target firms, is valued at or above 6.6 billion rand and the annual turnover or assets (whichever is greater) in, into, or from South Africa, of the target firm is valued at or above 190 million rand.

Intermediate and large mergers must be notified to and approved by the competition authorities before they are implemented. Small mergers need not be notified to the Commission as a matter of course. In two circumstances, small mergers will require certain action to be taken. The first is where a party to a small merger, or any entity within the group of companies to which a party to a small merger belongs, is under investigation or being prosecuted by the Competition Commission for a restrictive horizontal or vertical practice or an abuse of dominance. In such case, the merging parties must notify the Commission of their merger. They need not file a merger notification unless called upon to do so by the Commission and, unless and until they are so required to notify, may proceed to implement their merger. The second circumstance is where the Commission itself calls for a notification of a small merger. In such event, the merging parties must cease any further implementation of their merger and must notify the Commission in the standard form and obtain approval before implementation resumes.

iv Penalties

Parties to an intermediate or large merger may not implement such a merger without the prior approval of the competition authorities. In terms of Section 59(1)(d)(iv) of the Competition Act, if the parties to a merger have proceeded to implement the merger without the approval of the competition authorities, the Competition Tribunal may impose an administrative penalty not exceeding 10 per cent of a firm's annual turnover in South Africa and its exports from South Africa in the preceding financial year.

In addition to the foregoing, if a merger is implemented contrary to the Competition Act, the Competition Tribunal may:

a order a party to the merger to sell any shares, interest or other assets it has acquired pursuant to the merger; or

b declare void any provision of an agreement to which the merger was subject.

v Process and decision-makers

Small and intermediate mergers are investigated and decided by the Commission. In the case of large mergers, the Commission investigates the likely effect of the merger on competitive conditions and the public interest and makes a recommendation to the Tribunal. The Tribunal then convenes a public hearing, hears oral evidence and legal arguments where necessary and makes a decision. Decisions of the Commission may be referred to the Tribunal for reconsideration. Tribunal rulings may be appealed or reviewed by the CAC. With special permission from the Supreme Court of Appeal ('the SCA'), decisions of the CAC may be taken on appeal to the SCA.

vi Time periods

No time periods are prescribed by the Competition Act or the Rules for the Conduct of Proceedings in the Competition Commission in which the filing of a merger notice with the Commission must be made.

However, as stated above, parties to an intermediate or large merger may not implement such a merger without the prior approval of the competition authorities. The relevant approving authority for small and intermediate mergers is the Commission and for large mergers it is the Tribunal.

In terms of Sections 14 and 14A of the Competition Act, in the case of a large merger, there is no statutory maximum number of days for the competition authorities to finalise the process:

a The Commission has 40 business days to consider and refer such large merger to the Tribunal. The Tribunal may, on application by the Commission, extend this period by no more than 15 business days at a time, but for an unlimited number of times. In other words, in complex mergers, the Commission may, by application to the Tribunal (made either with or without the agreement of the merging parties) seek to extend its 40-business-day period for as long as may be required by it to complete its analysis of the merger. This initial period for analysis by the Commission (i.e., before its recommendation is made to the Tribunal) can run to in excess of eight months in complex cases.

b Within 10 business days of the referral to it of a large merger, the Competition Tribunal must schedule a pre-hearing meeting or hearing. This period may be extended.

c Within 10 business days of the hearing, the Competition Tribunal must approve or prohibit the merger and, within 20 business days thereafter, must issue reasons for its decision.

In the case of an intermediate merger, the Commission has an initial period of 40 business days to consider the merger and make a decision whether to approve (with or without conditions) or prohibit it. The Commission may unilaterally extend the above period by a further 20 business days.

vii Submission of a merger filing to the competition authorities

Merger procedures and formalities

A copy of the merger notification (having removed all confidential information) must be provided to:

a any registered trade union that represents a substantial number of its employees; or

b the employees concerned or representatives of the employees concerned, if there is no such registered trade union.

A merger filing is not complete (and the relevant time periods do not begin to run) until the relevant trade union or employee representatives have been served with a non confidential version of the merger notification.

In terms of Section 44 of the Competition Act, a person, when submitting information to the Commission, may identify any information that is confidential. Any such claim must be supported by a written statement explaining why the information is confidential. Confidential information means any trade, business or industrial information that belongs to a firm, has a particular economic value, and is not generally available to or known by others.

The merger filing fee (payable to the Commission) in the case of a large merger is 350,000 rand and, in the case of an intermediate merger, 100,000 rand. No filing fee is payable in the case of a small merger that is required to be notified.

Composition of a merger filing

The merger notification to be submitted to the competition authorities is composed of the following documents.

Statutory forms

These forms detail, inter alia:

a the identity of the acquirer and the target and their holding, subsidiary and associated companies;

b the identity of trade unions or employee representatives of the acquirer and the target;

c a description of the transaction;

d financial information pertaining to the acquirer and the target;

e the nature of the business activities of the acquirer and the target, their market shares and the market shares of their competitors;

f the identities of the customers of the acquirer and the target; and

g any pre-existing business relationships between the acquirer and the target.

Statutory documents

Various documents must be submitted to the Commission as a part of every merger filing. These include:

a the agreement upon which the transaction is premised (either in final form or the most recent draft);

b the most recent audited annual financial statements of the acquirer and the target;

c any minutes, documents, resolutions, presentations or summaries prepared for the board of directors of each of the acquirer and the target in respect of the proposed transaction;

d the most recent budget, business plan or forecast of each of the acquirer and the target; and

e the most recent report submitted by each of the acquirer and the target to the Securities Regulation Panel (where applicable).

Great care must be exercised in the preparation of all correspondence, memoranda, and - most importantly - presentations to the boards and various committees of the merging parties for the purposes of assessing the transaction. Far greater weight is given by the competition authorities to these contemporaneous recordals of intent and expected effect than is given to the carefully constructed arguments made in the competitiveness report prepared for the purposes of encouraging approval of the transaction.

Competitiveness report

In most complex matters, the merging parties must prepare a Competitiveness Report, which is an analysis of the impact of competition in the relevant market(s).

A comprehensive Competitiveness Report will contain, at least, the following:

a a detailed market definition;

b an analysis of markets shares and market concentration;

c details of the actual and potential level of import competition in the relevant market;

d a description of the ease of entry into the market, including tariff and regulatory barriers;

e details of the level, trends of concentration and history of collusion in the relevant market;

f details of the degree of countervailing power in the market;

g a description of the dynamic characteristics of the relevant market, including growth, innovation and product differentiation;

h an explanation of the nature and extent of vertical integration in the relevant market;

i an explanation of whether the transaction will result in the removal of an effective competitor; and

j if applicable, detail of whether (and why) the target firm is a 'failing firm'.

IV OTHER STRATEGIC CONSIDERATIONS

i Oversight of competition authorities

During the previous year under review, oversight of the competition authorities shifted from the Department of Trade and Industry ('the DTI') to a newly created Department for Economic Development ('the EDD'). Under the direction of Minister of Economic Development, Ebrahim Patel, the EDD has shown its hand very early as a far more interventionist department than had previously been the case under the DTI.

ii Heightened focus on public interest issues

The extent of public interest focus in South African merger control has once again increased enormously over the past year. This increased focus has manifested itself in vastly increased involvement in mergers by trade unions and government, and also in the attitude of the competition authorities themselves, which have given far greater time and attention to these matters than was previously the case.

iii Merger review process

A large merger hearing, or reconsideration of a decision by the Commission in an intermediate merger, before the Tribunal is a quasi-trial, the extent and duration of which is directly linked to:

a the complexity of the matter;

b the competition law and/or public interest concerns raised; and

c the degree of opposition to the merger (whether from the Commission or third parties).

The hearing in relation to a relatively benign merger, for instance, can be over in a matter of minutes and the merging parties will receive their clearance certificate in respect of the approval of the transaction usually within a day or two of the hearing.

The hearing of a particularly challenging transaction in South Africa has been known to last for several months, with a number of short periods of evidence and argument during that time. During this period, counsel are called upon to submit legal arguments, factual and expert evidence is led, witnesses are cross-examined, etc. The hearing of a complex merger will also likely be preceded by a discovery process and various interlocutory proceedings (including challenges to claims of confidentiality by the merging parties).

The merger hearing is an open process that attracts much interest from the press. The inner workings of the merging parties are scrutinised through an analysis of e-mails, memoranda, presentations, etc. It is a time-consuming, costly and invasive process. Importantly, the merging firms are effectively sterilised from other corporate activity (other than ordinary business, which can continue as usual) from the date of filing until the date on which the merger proceedings are finalised.

Any person can, in terms of Section 13B of the Competition Act, file any relevant information with the Commission in respect of a merger. Should a person raise concerns with the outcome of a merger or implore the Commission to prohibit a merger or approve a merger with conditions, the Commission will investigate and analyse the nature and validity of claims made and consider such in the overall examination of the merger.

The right to participate in Tribunal merger hearings is automatically conferred upon the parties to the merger, the Commission, trade unions or employee representatives that had indicated their intention to participate and the minister if he or she had indicated an intention to participate formally. In addition, any person that has a material interest in the merger may apply to intervene. In effect, a contested hearing will occur where interveners participate or the Commission or one or more unions oppose the merger.

Although third parties wishing to participate do need to apply to be admitted as interveners, the Tribunal will allow wide scope for intervention, except where the merging parties can definitively demonstrate that the third party's intentions are dishonourable (that the aim is not the furtherance of competition but some other personal gain or interest of the third party).

Extensive discovery proceedings (akin to those which occur in civil trials) are not only allowed but are, in fact, encouraged by the Tribunal - which sees such processes as a unique opportunity to expose the true rationale for the merger and the likely future conduct of the merged entity, if the merger is allowed. After lengthy and invasive discovery, witness statements (factual and expert, including from economists) are filed. Thereafter, a hearing, involving examination and cross-examination of witnesses is scheduled.

A lengthy, invasive and time-consuming process - usually involving senior management - will ensue in all contested scenarios.

The South African merger regime has been criticised for the fact that it is open to abuse by parties wishing to employ dilatory tactics with the aim of delivering commercial blows to competitively innocuous transactions. In a large merger, interveners are able to substantially delay finalisation of the South African merger process by raising alleged anti-competitive and contrary to public interest outcomes which are likely to result from an implementation of the merger. While these allegations, if unfounded, are ultimately likely to be exposed for what they are, an intervener in a large merger is likely able to substantially delay a transaction.

The competition tribunal is increasingly alive, however, to the need to balance the proper fulfilment of its mandate to analyse mergers, pursuant to an inquisitorial process, against the need of merging parties to close their transactions with some measure of promptness. For that reason, in the Massmart/Walmart transaction, the Tribunal laid down very strict time periods within which each of the Commission, merging parties, trade unions and government were permitted to present their witnesses and their argument. The entitlement of the Tribunal to regulate its process in this manner (and in so doing to potentially exclude certain evidence through lack of time) was challenged during the appeal and review process before the CAC. The CAC ruled that it was perfectly within the power of the Tribunal to regulate the proceedings in that manner. As such, it may be expected in future complex merger hearings before the Tribunal that a similar approach will be adopted. This, it is submitted, is a most positive development, in the interests of the merging parties, the Tribunal's management of its case load and, most importantly, the South African economy as a whole.

V OUTLOOK AND CONCLUSIONS

The increased involvement of government and trade unions in merger control review has taken root firmly. Trade unions in South Africa have already used this opportunity to negotiate whatever benefits can possibly be extracted for their members from any merger activity in South Africa.

The above, coupled with a more involved, interventionist approach by government, might well provide pause for thought about M&A activity to local and international investors. The time-consuming and expensive merger control process in South Africa, which not only allows for but - in fact - encourages intervention and opposition, must be expected to continue into the coming year making complex mergers difficult to navigate past the South African competition authorities.

Onerous inward-looking conditions may exacerbate the concern of foreign investors, although the hope of a measured outcome regarding the volunteered condition in the Walmart/Massmart merger may assist in neutralising such concerns.

Question marks remain over the competition amendment act, which has been promulgated since the mid-1990s but is not yet in force. If it is brought into effect by the president, then all sorts of new dimensions of personal liability and the like all come into play, adding additional complexity to south african competition law in general.

Footnotes

1. Lee Mendelsohn is a director and Amy van Buuren is an associate at ENS (Edward Nathan Sonnenbergs).

2. Kansai Paint Co Limited/Freeworld Coatings Limited Case No. 53/AM/Jul11.

3. Pioneer Hi-Bred International Inc/Pannar Seed (Proprietary) Limited and the Competition Commission/African Centre for Biosaftey Case No. 113/CAC/NOV11

4. Wal-Mart Stores Inc/Massmart Holdings Limited Case No. 73/LM/NOV10.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions