November 1, 2025
Competition Law
MERGERS, MARKETS, AND THE MEASURE OF FAIR PLAY: Lewis v Shoprite Decision.
“Shoprite, Zeerust” by Flowcomm, licensed under CC BY-SA 4.0. No changes made.
CASE FOCUS: Review of the Lewis Group / Shoprite Holdings Merger Competition Tribunal and Competition Appeal Court Decisions
INTRODUCTION & BACKGROUND
The decision of the Competition Appeal Court (CAC) in Pepkor Holdings Limited and Another v Lewis Stores Proprietary Limited is one of the most significant decisions issued by that court in the last decade. In 2024, Shoprite Holdings Limited decided to sell its furniture business to Pepkor Holdings Limited, a transaction that would merge two of the three major retail furniture outlets in South Africa (the “Merger”).
COMMISSION APPROVES THE MERGER
The Merger, constituted a large merger and was accordingly notified to the Competition Commission (the “Commission”) in terms of section 11(5)(c) of the Competition Act. A large merger cannot be implemented until it has been approved, with or without conditions, by the Tribunal or the CAC, as the case may be. The Commission duly investigated the effects of the Merger on competition and public interest. The Commission received a number of submissions from third parties, including competitors of the merging parties and trade unions. Upon conclusion of that investigation, the Commission recommended that the Tribunal approve the Merger.
LEWIS INTERVENES
Once the Commission recommends the approval of a merger, a third-party intervenor must apply for leave to intervene from the Tribunal, not the Commission. The right to intervene is regulated by, inter alia, section 53(c)(v) of the Competition Act and Rule 46 of the Rules of the Tribunal. Section 53(c)(v) read with rule 46, gives the Tribunal the discretion as to whether or not to allow a party to intervene. It is not an automatic right granted to an applicant. The Tribunal duly granted Lewis the right to intervene on a wide basis, which effectively amounted to the second guessing of the Commission’s investigation.
APPEAL BY MERGING PARTIES
The merging parties appealed the decision of the Tribunal to the CAC. The CAC, having considered 53(c)(v) of the Competition Act, Rule 46 of the Rules of the Tribunal, and prevailing case law on the matter, upheld the appeal and dismissed the intervention application.
REASONS FOR CAC DECISION
The CAC upheld the appeal because whilst Lewis had a material interest in the Merger, as a competitor of the merging parties, it had failed to provide evidence that would have assisted the Tribunal in its deliberations over the effects of the Merger on competition. The application by Lewis was replete with speculation and failed to provide evidence in support of its application for leave. The CAC having considered case law on the matter, emphasised that:
- when the Tribunal considers an application for intervention – it must demand that an applicant demonstrate an evidential basis for admission as opposed to speculation, for it is only the former which may assist the Tribunal in conducting its statutory mandate; and
- merely having a material intertest is not sufficient to get leave to intervene – the applicant must demonstrate to the satisfaction of the Tribunal that it has evidence and knowledge which it can bring to bear on the proceedings which provide clear assistance to the Tribunal in the disposition of the case, (“Intervening Threshold”).
Thus, because Lewis failed to meet the Intervening Threshold, the CAC dismissed its intervention application.
CONCLUSION
This case demonstrates that competition authorities, including the Tribunal, must be mindful of the fact that mergers must be dealt with efficiently and expeditiously. Importantly, the court emphasised that the “So-called Stalingrad legal tactics” have no place in a merger enquiry. This judgment bears significant implications for how mergers are, not just from a legalistic standpoint but also for business confidence and economic efficiency. This also brings greater predictability and trust for the business community in the competition law framework and ensures that the Competition Act aligns with global standards of fairness, efficiency, and economic growth.
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