Good news - merger thresholds increased

Increased thresholds for notifying mergers to the Competition Commission have been published to take effect on 1 April 2009.

A merger will now only be notifiable as an intermediate merger if the turnover or asset value of the target firm is R80 million (up from R30 million), and the assets or turnover of the target firm and acquiring firm together amount to more than R560 million (up from R200 million). Mergers will be notifiable as large mergers if the turnover or assets of the target firm exceed R190 million (previously R100 million) and the "combined figure" is R6,6 billion or more (previously R3,5 billion).

Filing fees have also been increased. The filing fee for the notification of an intermediate merger has been increased from R75 000 to R100 000 and for large mergers from R250 000 to R350 000.

This will further reduce the workload for the competition authorities, who have already seen a decline in mergers as a result of the global downturn. This easing of the workload will allow the Commission to devote greater attention to the problematic cases that require more sophisticated analyses, and will probably allow the Commission to divert further resources to investigating cartels and other prohibited practices, where they are currently already very active. Never has there been a greater imperative for clients to implement an effective competition law compliance audit.