“[However this was] subject to conditions the merging parties didn’t agree with,” Competition Tribunal South Africa said in a statement.
“In its investigation of the merger, the Commission concluded that the deal would substantially lessen competition in the market for the sale of canned pilchards.”
[DATA OCE:Oceana] is the largest fishing company in South Africa, whose fishing activities include the catching, processing, marketing and distribution of canned fish, fishmeal, fish oil and covering inshore, mid-water and deep-sea fishing . It is listed on both the Johannesburg and Namibia Stock Exchanges.
Foodcorp Limited is a food producer and manufacturer with eight production divisions including grocery, banking, milling, fishing and outdoor. Foodcorp’s fishing business, which will be at the centre of the tribunal hearing, consists of a pelagic division, a hake division and a lobster division.
According to the Tribunal, both firms would dominate the canned pilchards market once merged. This is as Oceana owns the Lucky Star brand of canned fish, and Foodcorp the Glenryck brand of canned fish.
“In order to maintain competition in this market the Commission required, as a condition to the merger, that Foodcorp should sell off the Glenryck trademark as well as Foodcorp’s fishing rights with respect to small pelagic fish (being pilchards and anchovies) as allocated by the Department of Agriculture, Fisheries and Forestry,” the Tribunal said.
According to both potential merging partners, however, the Tribunal’s conditions are not necessary to address any potential anti-competitive effects that could arise from the deal.
The Tribunal will hear the trial from 20 to 22 January before approving or prohibiting the merger.