01
WHAT IS A MERGER?
In terms of Section 12 of the Competition Act, 1998 (Act No.89 of 1998), as amended, a merger occurs 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 merger may occur through a purchase or lease of shares and assets, joint ventures and/or pure amalgamation of firms/businesses.
02
What is acquisition of control?
1. owns more than 50% of the issued share capital of another firm; and / or
2. has majority votes in general meetings; and / or
3. can appoint or veto the appointment of majority directors; and / or
4. has the ability to materially influence the policy of the firm.
03
I am not sure whether the proposed transaction results in any change in control. Who can I speak to?
If a business is uncertain about whether a transaction is a merger and should be notified with the Competition Commission or not, a written request for a non-binding advisory opinion, detailing the nature of the business proposal, may be submitted to the Chief Legal Counsel: Legal Services division. A charge of R2 500 will be levied for the advisory opinion. The advisory opinion is non-binding on both the Competition Commission, as well as the business. It would merely give the business a guide on matters that the Competition Commission would consider in the case of a merger, as well as an indication of potential difficulties.
04
When must the Competition Commission be notified of a Merger?
|
Thresholds |
Combined turnover / Asset value |
Target turnover / Asset value |
|
|---|---|---|---|
| Lower threshold | R 600m | R 100m | |
| Higher threshold | R6.6b | R 190m |
05
What are the Commission’s guidelines in relation to the notification of small mergers?
According to Section 13(3) of the Act, the Commission has discretion to require the parties to a small merger to notify the Commission of that merger, if the merger may substantially prevent or lessen competition or cannot be justified on public interest grounds. Merging parties may not take further steps to implement that merger until it has been approved or conditionally approved.
06
Who should file the merger
According to the Commission’s Rules, either the primary acquiring firm or the primary target firm can make a joint filing in terms of Rule 27 or a separate filing in terms of Rule 28. Rule 28 caters for instances where joint notification is not possible such as hostile takeovers. It should be noted however that in the case of a separate filing, either of the merging parties should approach the Commission to obtain permission to file separate notifications of the merger.
07
How does it cost to file for a merger
The filing fee for an intermediate merger is R165 000 and for a large merger is R550 000. There is no fling fee payable for a small merger notification.
2018.12.04 Comp Comm Merger Filing Fees
08
How do I notify the competition commision of a merger
A joint merger notification must be made in a single filing by one of the primary firms, and must include:
09
Where do I obtain the merger forms
The Merger forms can be obtained in the following manner:
- At the Competition Commission’s offices.
- On the Competition Commission’s website at www.compcom.co.za.
10
What would the Commission consider to be a complete merger filing?
In terms of the Commission Rule 30(1) within 5 business days after receiving a Merger Notice filed in respect of a merger declared to be a large merger, or within 10 business days after receiving a Merger notice filed in respect of any other merger, the Commission may deliver to the filing firm a Notice of Incomplete Filing, Form CC13(2) . The initial period for consideration of the proposed merger will not begin until the merging parties have satisfied all notification requirements set out in the Form CC13(2). The Commission may deliver a Notice of Complete Filing, Form CC13 (1). However, if neither Form CC13 (1) nor Form CC13 (2) is delivered within the statutory period the filing will be deemed to be complete.