The South African Competition Commission has since the beginning of 2017 prohibited eleven intermediate mergers and has recommended that four large mergers be prohibited. This number is substantially higher than 2016, when the Commission prohibited three intermediate mergers and recommended that one large merger be prohibited. For the period end of September to October 2017, the Commission prohibited five mergers.
This note will briefly look at two important and interesting trends that followed from the prohibitions of proposed mergers in South Africa since the beginning of 2017.
A move to take “coordinated effects” of the proposed merger into account
The first trend in the prohibition of mergers is a move to look at the “coordinated effects” of a proposed merger (a change in the market structure which better facilitates tacit collusion). In this regard the Commission adopted a policy favouring less concentration in markets and looking at a history of collusion in the market.