19 November 2012

Thoroughbred horseracing mergers in South Africa approved on appeal

On 15 November 2012, the Competition Tribunal of South Africa overturned a decision by the Competition Commission to prohibit two related mergers in the South African horseracing industry involving Gold Circle, Kenilworth Racing and the Thoroughbred Horseracing Trust.The Competition Commission had originally decided to prohibit the transactions, on 19 March 2012, on the basis that they would "significantly lessen competition in the horseracing administration, horseracing television rights, as well as the betting markets...". This decision was the subject of an appeal to the Competition Tribunal by the merging parties.A team of RBB economists including Patrick Smith and Andrew Swan advised the merging parties throughout the appeal process, working with legal advisors Roodt Inc. and Barkers Attorneys. This advice included the submission of an expert economic report evaluating the competitive effects of the mergers and assessing the analysis prepared by the Commission and its economic advisors.Following a lengthy hearing during which RBB economist Patrick Smith gave oral testimony under cross examination, the Competition Tribunal approved the transactions subject to the condition that there are no merger specific retrenchments in the two years following the transactions. In reaching its decision, the Competition Tribunal found that it was unlikely that the transactions would result in a substantial prevention or lessening of competition in the horseracing and sports betting markets in South Africa.

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