The Energy Regulation and Markets Review - Stikeman Elliott

South Africa
prescribed thresholds. These competition authorities include the Competition
Commission, which is responsible for processing notification and approval applications
and investigating mergers and acquisitions and the Competition Tribunal, which receives
recommendations from the Competition Commission in relation to large mergers and
acts as a court of first instance in adjudicating competition complaints.
The Competition Act recognises the concurrent jurisdiction of the Competition
Commission in relation to industries having their own regulatory authorities. It does so
on the basis that the Competition Commission will exercise primary authority to detect
and investigate alleged prohibited practices and review mergers within any industry or
sector while any other regulatory authority will exercise primary authority to establish
conditions within the industry it regulates as required to give effect to the relevant
legislation in terms of which that regulatory authority functions. 30
The focus of a merger review is whether or not the particular market, post merger,
will likely be less competitive and, if so, whether there is any technological, efficiency or
other pro-competitive gain that off-sets the anti-competitive effect of the merger.
No intermediate or large merger 31 may be implemented without the approval
of the Competition Commission. The Competition Commission has the power to
disallow intermediate mergers and to make any recommendations to the Competition
Tribunal on large mergers. In the case of an intermediate merger the Competition
Commission must respond within 20 business days from the date of submission of the
merger notification in the prescribed form. The Competition Commission may extend
the period for its response by notice to the party submitting the merger notification
given within that period, by up to 40 business days. The Competition Commission may
either approve the intermediate merger conditionally or unconditionally or prohibit it.
In the case of a large merger the Competition Commission must forward the merger
notification, together with its recommendations, to the Competition Tribunal within 40
business days from the date of submission of the merger notification in the prescribed
form. The Competition Commission may extend the period for such referral by notice
to the party submitting the merger notification for further periods of up to 15 business
days each. The Competition Tribunal may either approve the large merger conditionally
or unconditionally or prohibit it.
All licences issued by NERSA may be issued with conditions regarding the sale,
transfer, cessation, assignment and encumbrance of these licences by the holder. The
ERA, the Gas Act and the Petroleum Pipelines Act all prohibit the sale, transfer, cessation
or assignment of licences issued pursuant thereto.
30 Id.
31 An intermediate merger occurs where the value of the proposed merger equals or exceeds 560
million rand (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 80 million rand.
A large merger occurs where the combined annual turnover or assets of both the acquiring and
transferred or target firms are valued at or above 6.6 billion rand, and the annual turnover or
asset value of the transferred or target firm is at least 190 million rand (merger thresholds as at
1 April 2009, Competition Commission, www.compcom.co.za/merger-thresholds/).
245