File a merger

1. 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.

2. What is acquisition of control?

Control is acquired when a firm (including a close corporation and a trust)

  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.

There have been various Competition Tribunal (“Tribunal”) and Competition Appeal Court (“CAC”) decisions relating to acquisition of control and the following are summaries of some of the key decisions:

1. Bulmer SA (Pty) and Stellenbosch Farmer’s Winery Group (“SFW”) / Distillers Corporation (SA) Ltd and Others (Tribunal Case: 94/FN/Nov00); and Distiller Corporation (SA) Ltd / Bulmer SA (Pty) Ltd Case No: 08/CAC/May01

This case is significant in that a distinction was made between direct and indirect control and it addressed the issue of the merging parties forming part of a single economic entity. In making its determination of whether the parties where part of a single economic entity, the Tribunal in this instance found that it was necessary for shareholders to have a “common controlling mind” in order for the ultimate change of control argument to succeed. This was found to be lacking pre merger and hence the Tribunal held that the proposed transaction was notifiable.

The CAC dismissed the argument that only where ultimate control changes it is the case that a merger has occurred and is notifiable. The CAC held that the definition of a merger should be widely construed and could include the transaction as contemplated in the case in point. The CAC found that the merging parties were separate legal entities pre merger and therefore the transaction was held to fall within the meaning of section 12(1) of the Act.

2. Ethos Private Equity Fund IV / the Tsebo Outsourcing Group (Pty) Ltd Tribunal Case No: 30/LM/Jun03

This case is significant in that it reaffirmed the principle that a firm can be controlled by more than one person at the same time and established the principle that a firm will be deemed to have sole control of another firm if it acquires more than 50 percent of the shareholding of that firm, irrespective of the fact that there was no de facto change of control. Although a shareholder may be deemed to have acquired control by virtue of an acquisition of a majority stake there could still exists factual ‘joint control’ at the same time.

The Tribunal found that the proposed transaction amounted to a merger and that it was thus notifiable. The Tribunal found that there are certain “bright lines” set out in the Competition Act, which when crossed, constituted a merger. Although Tsebo only increased its shareholding from 49.9% to 53.8%, the transaction was a merger.

3. Competition Commission / Edgars Consolidated Stores Ltd (Edcon) and Retail Apparel Group (RAG) Tribunal Case No: 95/FN/Dec02

This case is significant in that direction was given by the Tribunal in terms of what constitutes the “whole or part of a business” as contemplated in Section 12 of the Act. The Tribunal noted that the acquiring firm intended to the secure the book debt of the target firm because it gave it access to a significant client base which was likely to boost Edcon’s market share. The Tribunal in this case held that the acquiring firm was acquiring, “more than a bare asset that would enhance its competitive position” in the relevant market and hence the merger was notifiable to the Commission.

3. 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.

4. When must the Competition Commission be notified of a Merger?

Merger thresholds as at 1 April 2009
Thresholds Combined turnover / Asset value Target turnover / Asset value
Lower threshold R 560m R 80m
Higher threshold R 6 600m R 190m


The Competition Commission must be notified of all intermediate mergers and acquisitions if the value of the proposed merger equals or exceeds R560 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 R80 million.

If the combined annual turnover or assets of both the acquiring and transferred / target firms are valued at or above R6.6 billion, and the annual turnover or asset value of the transferred / target firm is at least R190 million, the merger must be notified to the Competition Commission as a large merger.

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 based on the amended thresholds. It should be noted, however, that the merger notification calculator is not in any way intended to be or to replace independent legal advice and is non-binding on the Competition Commission. You may follow this link to access the merger notification calculator:

Alternatively a link to the merger notification calculator is available from the Commission’s home page:

If the proposed transaction does not meet criteria of intermediate or large mergers it will be categorized as ‘small merger.’ Section 13(2) of the Act allows for voluntary notification of small mergers by the parties at any time. Section 13(3) of the Act further determines that the Commission may require the parties to a small merger to notify the merger to the Commission within 6 months after implementation.

5. 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.

The Commission will evaluate whether a small merger requires notification on its own merits, within the guidance provided by section 13(3) of the Act. The Commission has published a notice that it will require the notification of all small mergers which meet any of the following criteria:

  • at the time of entering into the transaction any of the firms, or firms within their group, are subject to an investigation by the Commission in terms of Chapter 2 of the Act; or
  • at the time of entering into the transaction any of the firms, or firms within their group, are respondents to pending proceedings referred by the Commission to the Competition Tribunal in terms of Chapter 2 of the Act.

6. 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.

7. How much does it cost to file for a Merger?

The filing fee for an intermediate merger is R150 000 and for a large merger is R500 000.

There is no fling fee payable for a small merger notification.

8. How do I notify the Competition Commission of a Merger?

A joint merger notification must be made in a single filing by one of the primary firms, and must include:

  1. A merger Notice in Form CC 4 (1), which must declare the names of the primary acquiring and target firm and whether, in the opinion of the filing firm, the merger is small, intermediate or large.
  2. For each of the Primary Acquiring Firm and the Primary Target Firm, a Statement of Merger Information in Form CC 4 (2).
  3. All documents required as stipulated on each form including:
    1. A complete list of shareholders and their respective shareholding, including minority shareholders, for the primary acquiring firm and of any firm that directly or indirectly controls the primary acquiring firm; and
    2. Strategic documents of the merging parties in relation to the affected markets including, but not limited to, the following: Business plans, marketing documents, high-level strategic presentations and board minutes.
  4. a non-confidential version of the forms CC4 (1) , CC4 (2) and the report on competition if submitted.
  5. In an attempt to move to a paperless filing system, the Commission also encourages the merging parties to file electronically and include a CD of the merger filing.

The forms may be hand delivered to the Competition Commission’s Registry or may be e-mailed, faxed or posted.

A case number together with date of receipt will be issued to the notifying party. The case number must be used in all subsequent correspondence.

When lodging the forms of notification with the Competition Commission, the notifying party must provide proof of delivery of copies of the forms to every other party to the merger, as well as the relevant registered trade union or employee representatives, with the Competition Commission.

Before the date of filing the forms with the Competition Commission, the Merger filing fees must be paid into the following Competition Commission bank account:

Bank name: Absa Bank
Branch name: Pretoria
Account holder: Competition Commission fees account
Account number: 4050778576
Account type: Current account
Brach Code: 323 345

9. Where do I obtain the Merger forms?

The Merger forms can be obtained in the following manner:

  1. At the Competition Commission’s offices.
  2. On the Competition Commission’s website at

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.

In order to ensure that the parties provide a full and complete filing the Commission proposes the following requirements as constituting a complete merger filing:

  1. Merger Notice Form CC4(1);
  2. Schedule 1 & 2 to Form CC4(1);
  3. Statement of Merger information Form CC4(2) – Acquiring firm;
  4. Schedule 3-7;
  5. Statement of Merger information Form CC4(2) – Target firm
  6. Schedule 3-7;
  7. A report on Competition in the affected markets;
  8. Merger Agreement including the sale of business agreement and the draft / final shareholder’s agreement;
  9. Board Minutes, Reports and presentations of the Acquiring firm;
  10. Board Minutes, Reports and presentations of the Target firm;
  11. Most recent annual financial statements – Acquiring firm;
  12. Most recent annual financial statements – Target firm;
  13. Most recent business plans – Acquiring firm;
  14. Most recent business plans – Target firm;
  15. Claim for confidentiality Form CC7 – Acquiring firm;
  16. Claim for confidentiality Form CC7 – Target firm ;
  17. Most recent report provided to the Securities regulation panel – Acquiring firm;
  18. Most recent report provided to the Securities regulation panel – Target firm;
  19. Affidavit for unavailable information – Acquiring firm;
  20. Affidavit for unavailable information – Target firm;
  21. Proof of service on trade unions; and
  22. Proof of payment of the filing fee.

11. How do I claim confidentiality over documents submitted to the Commission?

To claim confidentiality over information that is submitted to the Commission, the merging parties must complete the Form CC 7 – confidentiality claim, which is available on the Commission’s website. Practitioners should note that in terms of the instructions on the Form CC7 you need to create a table (from column 1 to 5) indicating which information is confidential, why it is considered confidential information, which persons are restricted to access it, etc.

The Commission may refer to the Tribunal to determine if the information is confidential in terms of the Act. Parties will be notified if there is a referral. Until the Tribunal makes a decision the information will be treated as confidential in terms of the Commission’s Rules and Procedures. Confidential information will include trade, business industrial information that belongs to a firm, has a particular economic value as is generally not available or know to others. The Commission suggests that a company’s shareholders and area of business is not confidential whilst sales figures, supply agreements and strategic documents including, inter alia, marketing plans and board minutes will be confidential. An example of a completed table is provided on the next page.

Document Page and Line No. Firm Economic Value Restrictions on the Information
Letter from Company A to the Commission, dated 02 January 2009 Pg3, response to question 1(e) Company A This is commercially sensitive information which is not in the public domain and which is private and confidential. This information is only accessible to Company A’s senior management and directors.

12. What does the Commission consider in analysing a merger?

Section 12A of the Act sets out the analytical framework for the competitive assessment of mergers as follows:

  1. Is the merger likely to substantially prevent or lessen competition in the relevant markets?
  2. If it appears that the merger is likely to substantially prevent or lessen of competition in the relevant markets, then the Commission needs to determine whether these anti-competitive effects can be outweighed by technological, efficiency or other pro-competitive gains and whether a merger can or cannot be justified on substantial public interest grounds by assessing the factors set out in subsection (3).

In terms of Section 12A(2)(a) – (h) of the Act the Commission needs to evaluate the following factors to assess the strength of competition in the relevant market / s and determine whether the merger will result in any change in the competitive landscape that could substantially prevent or lessen competition in the relevant market / s:

  1. the actual and potential level of import competition in the market;
  2. the ease of entry into the market, including tariff and regulatory barriers (a merger is unlikely to create or enhance market power or to facilitate its exercise if entry into the market is timely, that is within a period of two years in most markets, likely to be profitable for new entrants and sufficient to return market prices to their pre-merger levels) ;
  3. the levels and trends of concentration (this is usually undertaken in the assessment of market shares and the calculation of the Herfindahl-Hirschman Index or HHI’s which is basically the sum of the squared market shares of merging parties and their competitors in the relevant market / s) and history of collusion, in the market;
  4. the degree of countervailing power in the market (that is the bargaining strength that the buyer has vis-a-vis the seller in commercial negotiations due to its size, commercial significance to the seller and its ability to switch to alternative suppliers);
  5. the dynamic characteristics of the market, including growth, innovation, and product differentiation;
  6. the nature and extent of vertical integration in the market;
  7. whether the business or part of a business of a party to the merger or proposed merger has failed or is likely to fail (the relevant tests in assessing the “failing firm” doctrine were outlined by the Tribunal in the Iscor Ltd / Saldanha Steel (Pty) Ltd decision (case number: 67/LM/Dec01). It should noted that the onus is on the merging parties to invoke the doctrine of the failing firm; and
  8. whether the merger will result in the removal of an effective competitor.

13. How long does it take to process a Merger?

Category of Merger Period of Investigation
Initial Period Extended Period
Small or Intermediate 20 business days Once only for 40 business days. The Commission has sole discretion in determination of the extending the period of investigation.
Large 40 business days One or more extensions of a maximum of 15 business days. The Commission requires the merging parties and the Tribunal’s consent to extend the investigation

As illustrated in the table above, the Commission has the initial 20 business days to investigate intermediate and small mergers. The Commission can, however, extend the investigation days by 40 business days (refer to section13 (5)(a), or section 14 (1)(a) of the Act). With regards to large mergers, the Commission has the initial 40 business days to investigate, the investigation days can be extended with a maximum of 15 days per request with consent from the merging parties and the Competition Tribunal (refer to section 14A(1)(b), 13(5)(a), 14(1)(a) of the Act and Rule 34(2)(a) of the Commission’s Rules.

14. What happens after the Competition Commission has looked at the merger notification?

In case of intermediate and small mergers, upon completion of the merger investigation, the Competition Commission will issue a certificate approving the merger, approving the merger subject to conditions or prohibiting a merger. In terms of Section 16(1)(a) of the Act, if the Competition Commission takes a decision, with which the merging parties do not agree, they can appeal the decision before the Competition Tribunal. And if the decision that is taken by the Tribunal is still agreeable to the merging parties, they can appeal before the Competition Appeal Court.

In case of large mergers, In terms of Section 16(2) and (3) of the Act, the Competition Commission will forward its recommendations to the Competition Tribunal, the Minister of Trade and Industry, and the merging parties. The recommendations must specify whether the merger should be approved, approved subject to conditions or prohibited. Then, the Competition Tribunal takes a final decision on the matter. In terms of terms of Section 17 of the Act, if the merging parties do not agree with the decision taken by the Competition Tribunal, they can appeal before the Competition Appeal Court.

15. I would like to speak to someone at the Competition Commission informally before I notify the Commission of a Merger. Who can I speak to?

The business can request for a pre-notification meeting with the manager of Mergers and Acquisition division to obtain any other necessary guidance related to merger procedure. The relevant contact person is Ms Lebogang Mabidikane and her contact details are as follows:

Tel: 012 – 394 1509

16. How can I contact the Competition Commission?

Below are the contact details of the Competition Commission:

Postal address
The Competition Commission of South Africa
Private Bag x23
Lynwood Ride

Physical address
The Competition Commission of South Africa
The DTI Campus
Mulayo (Block C)
77 Meintjies Street

Telephone, fax and e-mail address
Tel: (012) 394 3200
Fax: (012) 394 0166

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