Exam (elaborations)
LML4802 EXAM PACK 2023
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- University Of South Africa
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LML4802 EXAMPACK 2023
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LML4802
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CONFIDENTIAL
Page 6 of 9
LML4802
June/July 2021
QUESTION 1
1.1 Save Buy is a multinational retail corporation from China, with various stores
globally. Save Buy decides to buy 100% interests in Masiv Stores, a giant retail
store in South Africa, to enter the South African market. In as much as this
transaction will help Save Buy enter the South African market, various
stakeholders in South Africa are concerned that the transaction will harm public
interests. The concerns that stakeholders raise are; amongst others; that Save Buy
has a history of not respecting workers’ rights; the transaction will negatively affect
the South African manufacturing sector, Save Buy will not source its products from
South Africa and that jobs will be lost.
1.1.1 You are the merger and acquisitions manager at the Competition Commission.
Write a report in which you discuss the procedure that must be followed to assess
this merger and how the evaluation of the merger should be conducted. (10)
1.1.2 Suppose that during the investigation, it is found that the merger will result in loss
of employment for about 1200 staff out of the 16500 staff employed by Masiv
Stores. Further, it is also established that once the merger is approved, Save Buy
will use its global supply chain, which will affect South African suppliers, and this
will also lead to job losses in other parts of the supply value chain. As a presiding
officer of the Competition Tribunal, what would be the outcome of the merger? (10)
1.1.3 Discuss whether the ground of the public interest should form part of the factors to
consider when evaluating whether to approve a merger or not. Discuss your
answer with reference to the relevant authority. (10)
1.2 Brown Bakers is the supplier of baked products, including bread and has a market
share of 40%. Brown Bakers has been struggling to penetrate the market in Kwa-
Zulu Natal and Western Cape provinces. As a result, Brown Bakers agreed with
Soul Food, another supplier of bakery products, that since they are not making
huge returns in those two provinces, it would be appropriate for them to share the
market. In their discussions, they agree that consumers will benefit in that there
won’t be competition between suppliers, thereby reducing production costs. In
addition, the reduced costs of production will lead to lower prices for the benefit of
consumers. Retailers in the two provinces are disgruntled with the arrangement as
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