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Competition Act, 1998 (Act No. 89 of 1998)

Chapter 3 : Merger Control

12A. Consideration of mergers

 

(1) Whenever required to consider a merger, the Competition Commission or Competition Tribunal must initially determine whether or not the merger is likely to substantially prevent or lessen competition, by assessing the factors set out in subsection (2), and if it appears that the merger is likely to substantially prevent or lessen competition, then determine—
(a) whether or not the merger is likely to result in any technological, efficiency or other pro-competitive gain which will be greater than, and offset, the effects of any prevention or lessening of competition, that may result or is likely to result from the merger, and would not likely be obtained if the merger is prevented; and
(b) whether the merger can or cannot be justified on substantial public interest grounds by assessing the factors set out in subsection (3).

[Section 12A(1) substituted by section 9(a) of Notice No. 175, GG 42231, dated 14 February 2019]

 

(1A) Despite its determination in subsection (1), the Competition Commission or Competition Tribunal must also determine whether the merger can or cannot be justified on substantial public interest grounds by assessing the factors set out in subsection (3).

[Section 12A(1A) inserted by section 9(b) of Notice No. 175, GG 42231, dated 14 February 2019]

 

(2) When determining whether or not a merger is likely to substantially prevent or lessen competition. the Competition Commission or Competition Tribunal must assess the strength of competition in the relevant market, and the probability that the firms in the market after the merger will behave competitively or co-operatively, 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 merger or proposed merger has failed or is likely to fail;

[Section 12A(2)(g) inserted by section 9(c) of Notice No. 175, GG 42231, dated 14 February 2019]

(h) whether the merger will result in the removal of an effective competitor;

[Section 12A(2)(h) inserted by section 9(c) of Notice No. 175, GG 42231, dated 14 February 2019]

(i) the extent of ownership by a party to the merger in another firm or other firms in related markets;

[Section 12A(2)(i) inserted by section 9(d) of Notice No. 175, GG 42231, dated 14 February 2019]

(j) the extent to which a party to the merger is related to another firm or other firms in related markets, including through common members or directors; and

[Section 12A(2)(j) inserted by section 9(d) of Notice No. 175, GG 42231, dated 14 February 2019]

(k) any other mergers engaged in by a party to a merger for such period as may be stipulated by the Competition Commission

[Section 12A(2)(k) inserted by section 9(d) of Notice No. 175, GG 42231, dated 14 February 2019]

 

(3) When determining whether a merger can or cannot be justified on public interest grounds, the Competition Commission or the Competition Tribunal must consider the effect that the merger will have on—
(a) a particular industrial sector or region;
(b) employment;
(c) the ability of small and medium businesses, or firms controlled or owned by historically disadvantaged persons, to effectively enter into, participate in or expand within the market;
(d) the ability of national industries to compete in international markets; and

[Section 12A(3)(c)(d) substituted by section 9(e) of Notice No. 175, GG 42231, dated 14 February 2019]

(e) the promotion of a greater spread of ownership, in particular to increase the levels of ownership by historically disadvantaged persons and workers in  in the market.

[Section 12A(3)(e) inserted by section 9(f) of Notice No. 175, GG 42231, dated 14 February 2019]

 

[Section 12A substituted by section 6 of Notice No. 1354, GG 21880, dated 13 December 2000]