Can a small business have it’s say about a merger?

Can a small business have it’s say about a merger?


The Competition Act, 89 of 1998 (the “Competition Act”) applies to all mergers or acquisitions taking place in South Africa.  Mergers of a particular size (in terms of the merging parties’ assets or turnover in South Africa) are investigated by the Competition Commission and must be approved by the competition authorities before they are implemented.

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As mergers may create stronger and larger companies, and more concentrated markets, they may impact smaller businesses substantially.

When the Competition Commission investigates a merger, does the Competition Commission consider how it may affect smaller businesses?

Yes.  The purpose of the Competition Act is to promote and maintain competition in South Africa, including ensuring that small and medium-sized enterprises have an equitable opportunity to participate in the economy.

Whenever the Competition Commission considers a merger, it has to consider whether the merger will substantially prevent or lessen competition, by taking into account a range of factors, including whether the merger will result in the removal of an effective competitor.

Separately, the Competition Commission must consider the impact that the merger will have on the public interest factors set out in the Competition Act, which include the effect that the merger will have on the ability of small businesses to become competitive.

How does the Competition Commission obtain input from smaller businesses in this regard?

The merging parties are required to provide the contact details of their 5 largest competitors and customers.  If a smaller business is one of these competitors or customers, the Competition Commission will contact them for their views on the merger and whether or not they have any concerns with a merger from a competition perspective.

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Can smaller businesses who are not one of the merging parties’ largest competitors or customers provide views or submissions to the Competition Commission during the course of its investigation?

Yes.  In terms of the Competition Act, any person may submit any relevant information, document, affidavit or statement to the Competition Commission to consider as part of its investigation.

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What type of protection is offered to competitors or customers who may wish to raise concerns with the Competition Commission about a proposed merger?           

Information can be submitted on a confidential basis.  A confidentiality claim is available on the Competition Commission’s website  and where a business needs to claim its identity or the information that it submits to the Competition Commission as confidential, or both, it can do so.

What advice would you offer businesses wishing to raise concerns with a merger?

Where there are valid concerns, they should be raised with the Competition Commission.  The Competition Commission officials are available to hear concerns and the process is such that it is easy to submit information or comments to the Competition Commission.

It is important that the process be used correctly and that only concerns in relation to competition and relating to the merger are raised with the Competition Commission.

For example, the process is not intended to be used to leverage a company’s contractual position or to raise issues that are unrelated to the merger under investigation.

Tamara Dini
Tamara Dini is a Partner at Bowman Gilfillan Africa Group in the Competition Law Group. Tamara has been involved in a large number of mergers and behavioural competition matters, advising local and international clients on mergers and competition law investigations in South Africa and other African countries. Tamara also conducts competition compliance training for clients in respect of competition law across Africa.

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