Automated Summary
Key Facts
The Competition Tribunal of South Africa conditionally approved the acquisition of Britehouse Holdings (Pty) Ltd by Dimension Data Middle East and Africa (Pty) Ltd on 9 September 2015. The approval required a two-year moratorium on retrenchments due to overlapping positions between the merging entities. The Commission assessed that the merged entity would hold 13.21% market share in ERP services and 5.59% in Microsoft services, with significant competition from firms like Accenture, Deloitte, and IBM. It concluded the transaction would not substantially prevent or lessen competition in either market.
Issues
- A public interest concern was raised about potential retrenchments following the merger, as 43 positions in Britehouse overlapped with 23 in DiData MEA. The Commission and merging parties agreed on a two-year moratorium, which was made a condition of the merger approval.
- The tribunal assessed whether the proposed acquisition by Dimension Data MEA of Britehouse would substantially prevent or lessen competition in the national markets for ERP and Microsoft services. The Commission found the merged entity's market shares to be low, with significant competition from larger firms like Accenture and Deloitte, and concluded the transaction is unlikely to have a negative impact on competition.
Holdings
- The Competition Tribunal approved the proposed transaction on the condition that there will be no retrenchments for a period of two years. This was determined based on the Commission's findings regarding market shares and competition.
- The Tribunal concluded that the proposed transaction is unlikely to substantially prevent or lessen competition in the relevant markets (ERP and Microsoft services), as the merged entity's market shares are low and there are significant competitors present.
Remedies
The Competition Tribunal approved the proposed transaction on the condition that there will be no retrenchments for a period of two years.
Cited Statute
Competition Act of South Africa
Judge Name
- Andreas Wessels
- Medi Mokuena
- Norman Manoim
Passage Text
- [11] The Commission found that in the market for provision of ERP, the merged entity will have an estimated market share of 13.21% (with an accretion of 10.28%)... [12] In the market for provision of Microsoft services, the Commission found that the merged entity will have an estimated market share of 5.59% (with an accretion of 3.89%).
- [18] In light of the above we concluded that the proposed transaction was unlikely to substantially prevent or lessen competition. Accordingly we approved the proposed transaction on the condition that there will be no retrenchments for a period of two years.
- [16] The merging parties originally gave an undertaking that no retrenchments would occur for a period of one year... [17] There no other public interest concerns raised.