,LML4802 PORTFOLIO OCTOBER NOVEMBER
(COMPLETE ANSWERS) Semester 2 2024 - DUE 11
November 2024; 100% TRUSTED Complete, trusted
solutions and explanations.
SECTION A: COMPETITION LAW QUESTION 1 1.1 Vodacom Ltd
intends to acquire a stake in Business Venture Investments No
2213 (Pty) Ltd, as l known as ‘Maziv’. The Competition
Commission and Competition Tribunal have already decided on
this proposed merger. Therefore, the evaluation must be
focused on your analysis and not a repeat of what the
competition authorities have stated. Conduct focused research
on the companies guided by various provisions of merger
control. Thereafter, identify and classify the type of merger,
apply the relevant factors considered for evaluation of the
merger and make a recommendation in relation to the merger
as the competition commission. You must not discuss the
procedure and notification provisions of merger regulations.
(10) 1.2 The Competition Commission rejected Sun
International’s acquisition of Peermont Holdings, primarily on
competition concerns. Sun International approaches you to
make an improved proposal for acquiring Peermont Holdings. In
your improved proposal, you must address the competition
concerns raised by the competition commission. (10) 1.3
Connecta, a BEE level 1, female-owned internet service
provider, has been struggling to crack the fibre market fully,
especially at estates, business parks and residential complexes.
The primary challenge faced by Connecta was that its
,competitor, with a 60% market share, has exclusive agreements
with estates, business parks, and residential complexes, to
provide internet and fibre services, making it nearly impossible
for Connecta to compete within these markets. Advise
Connecta on how to address this matter in terms of the
Competition Act 89 of 1998. (10) 1.4 The residents of Soweto, a
famous township in South Africa, are disgruntled with the ever-
growing number of malls in the township as they believe that
they dislodge small businesses and spaza shops, and make it
impossible for these businesses to compete. Further, these
small businesses and spaza shops cannot operate within the
malls because the rental costs are prohibitive and unaffordable.
Discuss how this concern can be dealt with in terms of the
competition laws. (10) [40] CONFIDENTIAL Page 7 of 8 LML4802
Oct/Nov 2024
1.1 Analysis of Vodacom Ltd’s Proposed Acquisition of Maziv
(Business Venture Investments No 2213 (Pty) Ltd)
Type of Merger: Vodacom Ltd's proposed acquisition of Maziv
can be classified as a horizontal merger since both entities
operate within overlapping segments of the
telecommunications and internet services markets. A horizontal
merger involves two companies in the same industry and at the
same stage of the supply chain. This type of merger often raises
competition concerns, particularly related to market
concentration and consumer impact.
, Factors Considered for Evaluation: When evaluating this
horizontal merger under the provisions of South Africa’s
Competition Act 89 of 1998, the following key factors must be
applied:
1. Market Concentration: The Commission would assess the
Herfindahl-Hirschman Index (HHI) to measure the level of
concentration and market power resulting from the
merger.
2. Public Interest Considerations: The potential impact on
employment, small businesses, and historically
disadvantaged individuals would be evaluated as required
by section 12A of the Act.
3. Barriers to Entry: The Commission would consider
whether the merger increases barriers for new entrants
into the telecommunications sector, thereby stifling
competition.
4. Potential Anti-Competitive Effects: The potential for
collusion, price-fixing, and reduced consumer choice due
to the enhanced market power of Vodacom post-merger
would be analyzed.
5. Efficiency Gains: Any demonstrable efficiencies resulting
from the merger that would outweigh anti-competitive
effects, such as technological advancements and improved
services, would be considered.
