Among the cases that will come before the Competition Tribunal next Wednesday is the proposed merging of two former Rouxcor Holdings subsidiaries into Nedbank.
Nedbank acquired all shares in Retail Brands and Continental Beverages after their holding company, Rouxcor Holdings Limited, defaulted on its obligations to the bank in December 2000. Nedbank acquired control of five subsidiaries of Rouxcor and disposed of three in January 2001 but was unable to dispose of the remaining two.
In terms of the Competition Commission’s Practitioner Update issue 4, Nedbank was not obliged to notify the commission as these acquisitions took place in the ordinary course of Nedbank’s business as a bank. But it was, however, obligated, in terms of the commission’s Practioner Update, to dispose of interests or assets that it had acquired within a 12-month period. Nedbank, therefore, notified this transaction because it had been in control of the five subsidiaries for a period exceeding 12 months.
Since Nedbank acquired the firms, there have been a significant number of retrenchments. However, the parties contended that the retrenchments were as a result of losses suffered by the subsidiaries.
The commission found that the merger did not substantially prevent or lessen competition, as there was no overlap in the activities of the merging firms. Although the implemented merger raises significant employment concerns, the commission nevertheless recommended its unconditional approval. — I-Net Bridge