2014/15 Annual Report

Annual Report 2014/15
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11.1.2. Turnaround times
During the period under review, the Commission completed a pool of non-complex, complex and very complex investigations at an average turnaround time of 23,
46 and 67 business days, respectively. Where the average turnaround time exceeds the service standard, the difference is minimal. The Table below shows the 369
merger investigations finalised in the current financial year by complexity as well as the average turnaround time for the investigation.
Table 6: Summary of Turnaround times
Phase Total number of transactions Average Turnaround time (business days) Average Turnaround Time (business days)
Phase1 220 23 23
Phase 2 115 46 46
Phase 3 34 67 67 1
Total 369 34 34
Note: This table excludes cases withdrawn by the merging parties or where the Commission did not have jurisdiction.
11.2. Mergers approved with conditions
The Commission approves or recommends the approval of a merger with
conditions to the Competition Tribunal where it has found that a specific remedy
can address the competition or public interest concerns identified during the
merger review. In the current financial year, a total of 43 mergers were approved
with either behavioural or structural conditions compared to 22 in the previous
financial year.
In this financial year, the Commission monitored more than 100 conditions for
compliance. The Commission closed 52 conditions whose obligations on the
parties had lapsed.
11.2.1. Behavioural conditions: Addressing public interest concerns
In terms of Section 12A(1) of the Act, the Commission must consider both the
impact that a merger will have on competition and whether the merger can or
cannot be justified on substantial public interest grounds. This means that the
Commission is required to consider the effect of a merger on public interest
irrespective of the competition finding.
Section 12A(3) identifies four public interest grounds that the Commission must
consider:
(a) Employment;
(b) Impact on a particular sector or region;
(c) The ability of small businesses, or firms controlled or owned by historically
disadvantaged persons, to become competitive; or
(d) The ability of national industries to compete in international markets.
Of the 43 mergers approved with conditions, 39 had remedies aimed at
addressing a public interest concern. This is a significant increase from 10 cases
in the previous financial year.
Most of the conditions imposed by the Commission were designed to remedy
job losses, either through a moratorium restricting the number of job losses or
retrenchments over a specific time period or by capping the number of job
losses at a particular level. Other conditions imposed aimed to promote the
competitiveness of small businesses by providing them the opportunity to
compete in specific shopping centres by removing the exclusivity clauses in
lease agreements. Two cases also had conditions aimed to address a negative
impact on an industrial sector or region by obliging parties not to relocate their
manufacturing facilities outside South Africa.
1
There were seven large mergers that took between 93 and 136 days to finalise as a result of extensive competition analysis and lengthy consultations with key stakeholders.