The merger control regimei Review periods and time frames
The review process or periods for intermediate mergers comprises an initial waiting period of 20 business days. This period may be extended by a single period not exceeding 40 business days. The Act provides for a 'default' approval in cases where the Commission fails to extend the review period before the expiry of the initial waiting period, or fails to render a decision within the stipulated time frames.
In the case of large mergers, the Commission must, within 40 business days, forward to the Tribunal a written recommendation, with reasons, regarding the merger. This period is extendable with the consent of the Tribunal or the merging parties by periods of no more than 15 business days at a time. If upon the expiry of the period of 40 business days (or any extended period of time granted by the Tribunal) the Commission has neither applied for a further extension nor forwarded a recommendation to the Tribunal, any party to the merger may apply to the Tribunal to begin the consideration of the merger without a recommendation from the Commission.
When the Commission has forwarded a recommendation to the Tribunal, the registrar of the Tribunal must schedule a date within 10 business days for either the beginning of the hearing of the matter or for a pre-hearing conference in relation to the merger (should the circumstances require). This period of 10 business days may be extended for a further 10 business days by the chairperson of the Tribunal or for a further period by the chairperson with the consent of the parties. After completing its hearing in respect of a merger, the Tribunal must issue its decision within 10 business days after the end of the hearing, and within 20 business days thereafter, issue written reasons for its decision.
The Commission has published a medium-term performance plan that sets out the maximum number of business days within which the Commission aims to complete its review of notified transactions. The review period is calculated from the business day following the date on which a complete merger notification was filed. The 2018/2019 performance plan contemplates the following timelines.Phase I (non-complex)
The Commission aims to review Phase I mergers within 20 business days. These are mergers in which there is little or no overlap between the activities of the merging parties, no public interest issues and a simple control structure.Phase II (complex)
The Commission aims to review a Phase II merger within 45 business days. These are mergers between direct or potential competitors, or between customers and suppliers, where the merging parties have a combined market share of more than 15 per cent, or where public interest issues arise.Phase III (very complex)
The Commission aims to review a Phase III intermediate merger within 60 business days and a Phase III large merger within 120 business days. Phase III mergers are likely to result in a substantial prevention or lessening of competition (including any transactions involving 'leading market participants' where the combined market share of the transacting parties is more than 30 per cent).ii Ability to accelerate the review procedure, tender offers, hostile transactions
If a merger is a hostile transaction and the target is unwilling to submit a joint merger notification to the Commission, the acquiring firm may make an application to the Commission in terms of Rule 28 of the Commission Rules for an order authorising the parties to submit separate filings and directing the target to prepare and submit its merger notification within a specified period of time. The acquiring firm may also, to the extent possible, apply to submit certain information or documents on behalf of the target firm. The target firm will have an opportunity to contest the acquiring firm's application.
Mergers effected by way of tender offer are subject to competition review.
Once a merger notification is made and to the extent that there may be a need to accelerate the review periods, the Commission and Tribunal are prepared to consider expediting matters. However, neither the Commission nor the Tribunal have a formal 'fast track' procedure.iii Third-party access to the file and rights to challenge mergers
The Minister of Economic Development (now Trade and Industry) has the power to intervene in merger proceedings on public interests grounds. Employee representatives and trade unions also have locus standi to intervene in respect of employment-related matters, as per Section 12A of the Act and Rule 37 of the Commission Rules.
Section 13B (3) allows any person, whether or not a party to or a participant in merger proceedings, to submit any information that could be relevant to the investigated merger proceedings. However, this provision does not confer rights on any person to access the Commission's investigation file especially insofar as some material may be claimed as confidential by the parties or constitute 'restricted information'. Rule 46 of the Tribunal Rules permits a person who has a 'material interest' in a matter to apply for intervention by filing the prescribed documents which should include a substantiation of that person's interest in the matter. A material interest is a factual analysis to be analysed by the Tribunal that will also inform the extent of the intervention the Tribunal will allow. In Caxton and CTP Publishers and Printers Limited and Media 24 (Pty) Limited, Caxton, a competitor of Media24, was allowed to intervene and have rights, among others, to discover documents and attend pre-hearings in the merger involving Media24.iv Resolution of authorities' competition concerns, appeals and judicial review
The Commission is empowered to investigate any merger activity. Upon investigating a notified small or intermediate merger, the Commission can unconditionally approve the merger, approve the merger with conditions or prohibit the merger. Large mergers are investigated by the Commission and decided on by the Tribunal. If the Commission or the Tribunal identify competition or public interest concerns during the merger assessment, they will typically invite the parties to offer remedies to address the concerns or to adduce further evidence to demonstrate that the concerns do not arise, or are not merger-specific. In cases where conditions are imposed, the merger parties are consulted beforehand and generally afforded an opportunity to make submissions in respect of the proposed conditions.
The Commission is empowered to revoke its own decision pertaining to an earlier merger approval of a small or intermediate merger. Revocation may be applicable if the approval was based on materially incorrect information provided by the parties to the merger, if the approval was obtained by deceit, or if the firm concerned has breached a condition attached to the approval.
Intermediate or small mergers considered by the Commission can be referred to the Tribunal for re-consideration by an aggrieved party. A party aggrieved by the Tribunal's decision can approach the CAC for a review or appeal of the decision. The final court of appeal is the CC, which can also be approached by an aggrieved party where constitutional issues arise. The jurisdiction of an ordinary High Court has been ousted by competition legislation.
The Commission habitually publishes its decisions on proposed merger activity in the form of weekly bulletins found on its website.v Effect of regulatory review
The Commission has exclusive jurisdiction under the Act in relation to the review of mergers having an effect within South Africa. There are, however, new provisions under the Amendment Act that introduce parallel consideration of the national security concerns that may arise from a merger involving a foreign acquiring firm. While national security concerns are distinct from the competition and public interest assessment undertaken by the Commission, there is potential scope for overlap in relation to considerations of public interest issues.
In cross-border mergers, foreign competition authorities may simultaneously review a merger as it relates to their jurisdiction, but cannot make determinations that are binding on the South African competition authorities.