Competition Tribunal approves Ethos and Nampak merger

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Despite concerns being advanced by trade unions regarding a perceived likely impact on employment of the target businesses' employees, the Tribunal could not impose any employment related conditions on the merger without any evidence to substantiate that the merger would negatively affect employment. The Commission's hands were further tied by the various submissions made by the merging parties confirming that the transaction would not result in any unskilled or semi-skilled employees being retrenched.

No retrenchments

The Tribunal did, however, hold the merging parties to an undertaking to refrain from any merger specific retrenchments for two years after the merger, save for two executive employees who would not transfer to the acquiring firm.

The Tribunal has, in this case, demonstrated that it will not impose a merger specific moratorium on retrenchments solely on the basis of unsubstantiated concerns of trade unions. Where the Competition Commission has no reason to discredit the merging parties' submission that a merger will not give rise to employment related public interest effects, the Tribunal has no reason to impose employment conditions where there is no justification for discrediting the merging parties' submission that a merger will not give rise to employment related public interest effects.