Global Competition Law is primarly a practitioner's guide presenting the most salient aspects of the major competition laws country by country, giving an overview of their structure and most charasteristic elements.
Global Competition Law also provides insight into possible future developments in the field.

Global Competition Law

The Competition Act provides that the Minister in consultation with the Competition Commission, must determine the thresholds for large, intermediate and small mergers; the merger is deemed “large” if the combined annual turnover or assets of both the acquiring and transferred/target firms are valued at or above ZAR 6.6 billion (US$ 404 million), and the annual turnover or asset value of the trans …

Thresholds

Merger review is governed by Chapter III of the Competition Act. It provides for a review by Competition Commission or Competition Tribunal of concentrations exceeding certain defined thresholds. The Competition Act distinguishes three categories of merger, large, intermediate and small according to the value and turnover of the acquiring group and of the target. Whether control is mandatory, suspends the operation or falls within the jurisdiction of the Competition Commission or the Competition Tribunal depends on the category the merger belongs to. The Competition Amendment Act No 18 of 2018 brought significant changes to the assessment of mergers. It also introduced a control of foreign investment which may lead, when the transaction is deemed to have an adverse effect on national security, to the prohibition of the proposed merger by an especially designed Committee (new Section 18A).

Context

   In order to fall within the scope of the provisions, the merger must constitute a concentration, which is defined by Section 12 of the Competition Act: a concentration is deemed to arise when one or more firms directly or indirectly acquire or establish direct or indirect control over the whole or part of the business of another firm. A concentration may occur through a purchase or lease of shares and assets, joint ventures and/or pure amalgamation of firms/businesses. The Competition Act provides examples of cases of acquisition of control: owning of more than 50% of the issued share capital of another firm, obtaining majority votes in general meetings, having the right to appoint or veto the appointment of majority directors and/or having the ability to materially influence the policy of the firm.

On 4 April, 2025, the South African Competition Commission published final guidelines on indivisible transactions, stating that when a series of interdependent economic operations constitutes a single global transaction, they must be assessed collectively under merger control to prevent artificial structuring aimed at evading competition review.

Concept of concentration

The Competition Act provides that the Minister in consultation with the Competition Commission, must determine the thresholds for large, intermediate and small mergers; the merger is deemed “large” if the combined annual turnover or assets of both the acquiring and transferred/target firms are valued at or above ZAR 6.6 billion (US$ 404 million), and the annual turnover or asset value of the transferred/target firm is at least ZAR 190 million (US$ 11.6 million); the merger is deemed “intermediate” if the value of the proposed merger equals or exceeds ZAR 600 million (US$ 36.7 million) (calculated by either combining the annual turnover of both firms or their assets), and the annual turnover or asset value of the transferred/target firm is at least ZAR 100 million (US$ 6.1 million); under these thresholds, the merger is deemed “small”. The Commission has developed a merger notification calculator to assist practitioners and the merging parties in determining whether a merger is small, intermediate or large.

The Competition Commission or Competition Tribunal must initially determine whether a large or intermediate merger is likely to substantially prevent or lessen competition. It must assess the strength of competition in the relevant market and the probability that the firms in the market after the merger will behave competitively or cooperatively, taking into account different factors, set out in Section 12A of the Competition Act (actual and potential level of import competition, ease of entry into the market, levels and trends of concentration, degree of countervailing power, dynamic characteristics of the market, nature and extent of vertical integration, whether the merger will result in the removal of an effective competitor). If the Competition Commission or Competition Tribunal concludes that the merger is likely to prevent or lessen competition, then it has to determine (i) whether or not the merger is likely to result in any technological, efficiency or other pro-competitive gain which will be greater than, and offset, the effects of any prevention or lessening of competition, that may result or is likely to result from the merger, and would not likely be obtained if the merger is prevented; and (ii) whether the merger can or cannot be justified on substantial public interest grounds by assessing the factors set out in Section 12A(3). Those factors, the list of which was amended in 2018, include the effects that the merger will have on a particular industrial sector or region, employment, the ability of small businesses or undertakings controlled or owned by historically disadvantaged persons, to enter into, participate or expand in the market, the ability of national industries to compete in international markets, and the promotion of a greater spread of ownership, in particular to increase the levels of ownership by historically disadvantaged persons and workers in undertakings in the market. The 2018 amendments also modified Section 18 of the Act, which now provides that in order to make representations on any public interest ground referred to in section 12A(3), the Minister may participate as a party in any merger proceedings before the Competition Commission, Competition Tribunal or the Competition Appeal Court.

Where assessing the effects of the merger on the market, new factors must be taken into account following the 2018 amendments: the extent of ownership by a party to the merger in another undertaking or other undertakings in related markets; the extent to which a party to the merger is related to another undertaking or other undertakings in related markets, including through common members or directors; and any other mergers engaged in by a party to a merger for such period as may be stipulated by the Competition Commission.

The Commission has revised its public interest guidelines with the aim of incorporating socio-economic considerations. Although these guidelines are not legally binding, they serve to inform the Commission’s approach to assessing the public interest effects of mergers, in accordance with Section 12A(3) of the African Competition Act, 1998.

Global Competition Law

1263. Thresholds

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Les notions juridiques connexes

1263. Thresholds

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise