Following an intervention application which was heard by the Competition Tribunal (“Tribunal”) last week, the Tribunal has granted Caxton and CTP Publishers and Printers (“Caxton”) intervention status in the merger involving Media24 (Pty) Ltd (“Media24”), Paarl Media Group (Pty) Ltd, Paarl Media Holdings (Pty) Ltd and Paarl Coldset (Pty) Ltd (collectively referred to the “merger parties”).
The Tribunal has ordered that the intervention will include the control structure of Naspers Limited (”Naspers”), the interests (both direct and indirect) of the Naspers’ shareholders in printing and publishing and the competition effects of such interests in relation to the proposed merger. In addition, the scope of Caxton’s intervention also includes whether the proposed merger will enhance coordination in the media industry and the effect of the proposed merger on the public interest. Caxton is also entitled to submit proposed conditions, if any, to the Tribunal.
In addition, the Tribunal, in terms of a directive, ordered the merger parties to disclose all interests of Naspers Beleggings Limited, Keeromstraat 30 Beleggings Limited, Wheatfields 221 (Pty) Ltd, Sholto Investments BVI, De Goedgedacht.
The matter is of significant importance in ensuring South African merger control remains sacrosanct. Merger control in South Africa is, as in other jurisdictions, an important mechanism to assess the impact of transactions on competition, however, it can only be effective if adequate and accurate information is provided by the merging parties to the SACC. The content of a merger filing is usually vetted by the merging parties’ respective competition lawyers.
Disclosure of all shareholders’ interests (both direct and indirect) is of particular importance in respect of the control structures involved in the proposed transaction, in order to ensure that the Commission is able to conduct a proper assessment of the proposed transaction, taking into account the competitive landscape and the dynamic concomitant impact of the proposed transaction, by properly taking into account the relevant shareholders. It is important that the merging parties are transparent in all of their dealings with the competition authorities and that the Commission is apprised of all the information during the merger investigation in order to conduct a proper investigation to avoid having the Tribunal send the merger back for further investigation and analysis to the Commission, as was ordered by the Tribunal in the Aspen/ Pfizer matter and more recently, in this decision of the Tribunal.
In addition, the merging parties are obliged to sign the respective Statements of Information (also referred to as the Form CC4(1) and Form CC4(2)) in respect of every merger which is filed with the Commission. The Form CC4(2) explicitly states that the person authorised to submit the information confirms the accuracy, truthfulness and completeness of the information submitted to the Commission and that such person understands that it is an offence in terms of the Competition Act to provide any manner of false information.
The Tribunal’s directive clearly casts doubt as to whether the content of the original merger filing met the above criteria .
The matter does, however, demonstrate the importance of valid intervention by competitors, despite the intervention regime becoming somewhat tainted due to interventions by government and unions on the basis of alleged “public interest” concerns.