The Tribunal has conditionally approved the proposed large merger whereby Shoprite Checkers (Pty) Ltd (“Shoprite”) intends to acquire various registered trademarks (the “Trademarks”) owned by Mr. Basil Synodinos (“Mr. Synodinos”).
 
Post-merger, Shoprite will own the Trademarks used by the President Outlets in conducting their retail grocery operations. Accordingly, the President Outlets will be obliged to pay Shoprite Group fees associated with using the Trademarks. The President Outlets are three retail grocery outlets in Gauteng, namely: (i) President Hyper Krugersdorp; (ii) President Hyper Vaal; and (iii) President Supermarket, which are solely controlled and operated by Mr. Synodinos.
 
CONDITIONS
 
Contractual Options
 
The Competition Commission (“Commission”), which investigates proposed large mergers before referring them to the Tribunal for a final decision, found that the merger is unlikely to result in a substantial lessening or prevention of competition in any relevant market in South Africa.
 
However, the Commission found that the merger parties contemplate various contractual options which may result in Shoprite acquiring the President Outlets in the future. Therefore, the Tribunal has approved the transaction subject to the merger parties notifying the exercise of the contractual options to the Commission, as a merger. If the contractual options are not exercised (resulting in Shoprite not acquiring the President Outlets) Shoprite will be required to inform the Commission as well.
 
Expansion Plans
 
Shoprite must endeavour (in line with its proposed expansion plans for the Trademarks) to open outlets operated by a franchisee under the Trademarks’ name over the next five years, subject to South Africa’s economic conditions. To the extent that Shoprite believes the economic conditions do not warrant the opening of additional outlets, the merger parties will have to apply to the Tribunal for a waiver or variation of this condition.