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Parr, Geoff --- "The Treatment of Efficiencies in South African Merger Consideration" [2009] ELECD 194; in Drexl, Josef; Idot, Laurence; Monéger, Joël (eds), "Economic Theory and Competition Law" (Edward Elgar Publishing, 2009)

Book Title: Economic Theory and Competition Law

Editor(s): Drexl, Josef; Idot, Laurence; Monéger, Joël

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781847206312

Section: Chapter 5

Section Title: The Treatment of Efficiencies in South African Merger Consideration

Author(s): Parr, Geoff

Number of pages: 10

Extract:

5. The treatment of efficiencies in
South African merger consideration
Geoff Parr*

The South African Competition Act has explicit public-interest objectives,
including the promotion of employment, which sometimes conflict with
other objectives such as efficiency and competitive prices. This chapter dis-
cusses the treatment of efficiencies in the Act, and the interaction of
efficiency considerations with the public-interest consideration of employ-
ment. The chapter also discusses the definitive decision by the Competition
Tribunal on efficiencies, the Trident/Dorbyl merger. In that decision, the
Tribunal held that job savings cannot be counted as efficiencies in an
efficiency defence of an anti-competitive merger, because the promotion of
employment is in the public interest.


1 INTRODUCTION

This chapter will consider some of the issues about efficiencies as they apply
to South Africa, particularly in respect of merger consideration. The South
African Competition Act, Act No 89 of 1998, is a well-drafted piece of leg-
islation that has been successfully applied since 1999 by the three competi-
tion agencies established in terms of the Act. These institutions are the
Competition Commission, which investigates mergers and complaints,
decides on `intermediate' mergers and refers all `large' mergers and selected
complaints to the Competition Tribunal. The Tribunal is a world-class
adjudicative body that hears large mergers and complaints referred to it by
the Commission. It also hears appeals on intermediate mergers ruled on by
the Commission. In turn, the decisions of the Tribunal are subject to appeal
to the Competition Appeal Court, ...