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.