The Competition Tribunal has approved, with conditions, the proposed merger between VKB Landbou (Pty) Ltd (VKB) and Multi Green (Pty) Ltd.
VKB is a private company involved in various agricultural activities countrywide, through its subsidiaries. Multi Green specialises in the blending of granular and liquid fertilisers. The Free State based company also sells fertiliser to farmers in the Free State, Mpumalanga, Gauteng, North West and Northern Cape.
The Competition Commission found that the transaction did not raise any competition or public interest concerns and recommended that the tribunal approve the merger without conditions.
However, during the hearing before the tribunal, the tribunal was concerned that the merger could facilitate the exchange of competitively sensitive information. The concern was prompted by a complaint received from one of Multi Green’s competitors during the commission’s investigation.
The complaint alleged that VKB, which provides finance/credit to farmers to purchase agricultural inputs such as fertiliser, has access to competitively sensitive information of competing suppliers of fertiliser. Post-merger, Multi Green could have access to the competitively sensitive information, by virtue of being part of VKB and thereby undermine competition in the supply of fertiliser to farmers.
To address the concerns, the tribunal required that the merger be approved with the following conditions, to which VKB and Multi Green agreed:
- For as long as VKB controls Multi Green, the companies must ensure that no individual with operational involvement in Multi Green shall have access to the competitively sensitive information, and
- VKB must design and implement a confidentiality and information exchange policy, which will be monitored for compliance by the commission. The policy must stipulate, among others, that the relevant individuals at VKB with access to the competitively sensitive information, shall not share or discuss any such information with any individuals with operational involvement in Multi Green. – Press release