The decision has been welcomed by the Competition Commission as a positive step aligned with the government’s aims to increase investment and growth.
South Africa has altered its merger thresholds for the first time since 2017, following a review by the Competition Commission of South Africa. The amendments were gazetted by Minister of Trade, Industry and Competition Parks Tau on 8 May.
The revisions were announced as part of government efforts to improve efficiency under its agenda targeting higher levels of growth and investment.
The new thresholds for combined turnover/asset value have been confirmed at ZAR 1 billion (USD 59.9 million) at the lower end and ZAR 9.5 billion (USD 569 million) as the higher threshold, compared to the previous lower threshold of ZAR 600 million (USD 35 million) and the higher threshold of ZAR 6.6 billion (USD 395 million).
Additionally, the thresholds for target turnover/asset value have been updated from a lower threshold of ZAR 100 million (USD 5.9 million) to ZAR 200 million (USD 11.9 million) and a higher threshold of ZAR 190 million (USD 11.3 million) to ZAR 280 million (USD 16.7 million).
The Competition Commission said in a statement that the new thresholds were intended to “reduce red tape and ensure that mandatory notification remains focused on transactions most likely to raise competition or public interest concerns”.
According to the Competition Commission, its research of merger activity over the last two years suggested that a sizeable fall in notifiable mergers would be possible without sacrificing enforcement, especially given that many transactions that would fall below the revised thresholds would have previously been approved without conditions.
The Commission also argued that the lower number of routine filings would allow it to dedicate its resources to the more complex mergers. The South African legal system has been struggling for years with capacity issues, with the Gauteng High Court taking as long as six years for a case hearing.
