TRIBUNAL CONFIRMS SETTLEMENT AGREEMENT WHEREBY FIRMS AGREE TO PAY A R350K FINE FOR FAILING TO NOTIFY A MERGER
The Tribunal has confirmed a settlement agreement wherein Shashe Trading (Pty) Ltd (”Shashe”) and Devenco 44 (Pty) Ltd (“Devenco”) admit that they contravened the Competition Act (“the Act”) by implementing a merger transaction without notifying the Competition Commission (“the Commission”) in 2019.
Terms of consent agreement
Shashe and Devenco accept that they are jointly and severally liable to pay an administrative penalty (a fine) of R350 000 (three hundred and fifty thousand Rand), the one paying and the other to be absolved.
Among others, the firms also agree to develop, implement and monitor a competition law compliance programme, incorporating corporate governance, to ensure that their employees, management, directors and agents do not contravene the Act in future.
On 29 November 2019, the Commission received a notice of an intermediate merger between Shashe and Devenco in respect of Mopani SuperSpar supermarket business. In the merger notification documents, Shashe indicated that the merger had already been implemented i.e., Shashe took control of Devenco’s Mopani SuperSpar on 6 June 2019.
The Commission’s investigation found that the purchase by Shashe constituted a merger in terms of the Act. Shashe, however, only notified the Commission five months after Shashe took control of Mopani SuperSpar. Accordingly, Shashe and Devenco acted in contravention of the Act.
In assessing the transaction after notification, the Commission found that the merger did not raise any competition concerns and actually had a positive impact on the public interest in that the Mopani SuperSpar employees would have been negatively affected absent the merger. The merger was accordingly approved by the Commission, without conditions, on 26 February 2020.
Gillian de Gouveia, Communications Officer
On behalf of the Competition Tribunal of South Africa
Cell: +27 (0) 82 410 1195
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