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Mergers: an avoidable Ouch |
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by Roxanne Ker
For eleven years many firms ignored the Competition Act’s requirement to secure competition’s approval for a merger. Although the Tribunal did impose penalties – one, in 2008, as high as R500 000 – again and again merging parties continued to implement mergers without approval.
In November 2010 the Commission toughened up. The Act had been in operation for more than a decade and firms were continuing to claim that their non-compliance was a bona fide error. Saying that this was unacceptable, the Commission levied a million-rand penalty on an acquiring firm and R100 000 on the target firm.
Aside from its we-mean-business numerals, this ruling jolted the tendency for target firms to assume that notification is not their job. Under the Act all parties to a merger are obliged to notify the Commission of the proposed merger. Therefore, said the Commission, the parties should be held jointly liable for the offence.
Whichever side of a merger you are on, best have your attorneys make sure your transaction is properly notified. |