Further to the previous release issued on 28 September 2022, titled 'New guidelines aim to capture more notifiable mergers', the Competition Commission (Commission) has issued revised Guidelines on Small Merger Notification (Small Merger Guidelines), correcting the wording erroneously included in the criteria for determining when firms will need to inform the Commission about small mergers.
The corrected wording now reads:
The Commission will require that it be informed of all small mergers and share acquisitions where the acquiring firm’s turnover or asset value alone exceeds the large merger combined asset/turnover threshold (currently ZAR 6.6-billion) and at least one of the following criteria must be met for the target firm:
- the consideration for the acquisition or investment exceeds the target firm asset/turnover threshold for large mergers (currently ZAR 190-million); or
- the consideration for the acquisition of a part of the target firm is less than the ZAR 190-million
- threshold but effectively values the target firm at ZAR 190-million or more.
The revised Small Merger Guidelines also now clarify that these guidelines are effective from 1 December 2022.
As such, small mergers do not require mandatory notification, but in terms of section 13(3) of the Competition Act, the Commission may require, up to six months after the small merger has been implemented, that such mergers be notified and approved by the Commission if, in the opinion of the Commission, the merger may substantially prevent or lessen competition or cannot be justified on public interest grounds.
Submitted by Webber Wentzel