SOUTH AFRICA’S PROPOSED GUIDELINES ON PENALTIES FOR FAILURE TO NOTIFY A MERGER—SOME PREDICTABILITY, SOME UNCERTAINTY

By Sivuyise Lutshiti Thursday, December 21, 2017
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On February 17, 2017, the South African Competition Commission (“Commission”) published “Draft Guidelines for the Determination of Administrative Penalties for Failure to Notify a Merger and Implementation of Mergers Contrary to the Competition Act” (the “Guidelines”). The Commission published the Guidelines in response to the identification of a number of cases of failure to notify mergers and implementation of mergers contrary to Chapter 3 of the Competition No. 89 of 1998 (as amended) (the “Act”) and to the Competition Tribunal (“Tribunal”) calling upon the Commission to formulate guidelines in this regard. The proposed Guidelines attempt to provide an approach for determining penalties in instances where parties have failed to notify a merger or have implemented a merger prior to receiving approval from the competition authorities. The Act requires that intermediate and large mergers be notified to the Commission and such mergers may not be implemented until they are approved, with or without conditions, by the competition authorities.

An intermediate merger is one where the value of the target firm’s assets in South Africa or its turnover generated in, into or from South Africa, is between Rand (“R”) 100 million2 and R 190 million and the combined value of the turnover generated in, into or from South Africa or the assets in South Africa of the acquiring firm and the target firm is between R 600 million and R 6,6 billion. A large merger is one where the value of the target firm’s assets in South Africa or its turnover generated in, into or from South Africa is R 190 million or more and the combined value of the turnover generated in, into or from South Africa or the assets in South Africa of the acquiring firm and the target firm amount to or exceed R 6.6 billion.

This article was first published by ABA’s Section of International Law Antitrust Committee.

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