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Competition Act, 1998 (Act No. 89 of 1998)

Chapter 3 : Merger Control

18A. Intervention in merger proceedings involving foreign acquiring firm

 

(1) The President must constitute a Committee which must be responsible for considering in terms of this section whether the implementation of a merger involving a foreign acquiring firm may have an adverse effect on the national security interests of the Republic.

 

(2) The Committee contemplated in subsection (1) must consist of such Cabinet Members and other public officials as may be determined and appointed by the President.

 

(3) The President must identify and publish in the Gazette a list of national security interests of the Republic, including the markets, industries, goods or services, sectors or regions in which a merger involving a foreign acquiring firm must be notified to the committee referred to in subsection (1), in terms of subsection (6).

 

(4) In determining what constitutes national security interests for purposes of this Act, the President must take into account all relevant factors, including the potential impact of a merger transaction—
(a) on the Republic’s defence capabilities and interests;
(b) on the use or transfer of sensitive technology or know-how outside of the Republic
(c) on the security of infrastructure, including processes, systems, facilities, technologies, networks, assets and services essential to the health, safety, security or economic well-being of citizens and the effective functioning of government;
(d) on the supply of critical goods or services to citizens, or the supply of goods or services to government;
(e) to enable foreign surveillance or espionage, or hinder current or future intelligence or law enforcement operations;
(f) on the Republic’s international interests, including foreign relationships;
(g) to enable or facilitate the activities of illicit actors, such as terrorists, terrorist organisations or organised crime; and
(h) on the economic and social stability of the Republic.

 

(5) The President must issue regulations governing—
(a) the notification, processes, procedure and timeframes to be followed by the Committee referred to in subsection (1) when performing its functions under this section; and
(b) access to information concerning the merger, including confidential information.

 

(6) A foreign acquiring firm which is required to notify the Competition Commission in terms of section 13A(1) of an intended merger must, at the time of the notification of the merger to the Competition Commission, file a notice with the Committee referred to in subsection (1) in the prescribed form and manner if the merger relates to the list of national security interests of the Republic as identified by the President in terms of subsection (3).

 

(7) Within 60 days of receipt by the Committee referred to in subsection (1) of a notice in terms of subsection (6), or such further period which the President may agree to, on good cause shown, the Committee must consider and decide on whether the merger involving a foreign acquiring firm may have an adverse effect on the national security interests of the Republic identified by the President in terms of subsection (3).

 

(8) The Committee referred to in subsection (1) may take into account other relevant factors, including whether the foreign acquiring firm is a firm controlled by a foreign government.

 

(9) During its consideration of a merger in terms of this section, the Committee may consult and seek the advice of the Competition Commission or any other relevant regulatory authority or public institution.

 

(10) The Minister must, within 30 days of the decision contemplated in subsection (7)—
(a) publish a notice in the Gazette of the decision to permit, permit with conditions or prohibit the implementation of a merger; and
(b) inform the National Assembly, in appropriate detail, of the decision.

 

(11) The Competition Commission may not consider a merger in terms of section 12A, and the Competition Tribunal may not consider a merger in terms of section 16(2), if the foreign acquiring firm failed to notify the Committee in terms of subsection (6).

 

(12) The Competition Commission may not make a decision in terms of section 13(5)(b) or 14(1)(b), and the Competition Tribunal may not make an order in terms of section 16(2), where the Minister has published a notice in the Gazette prohibiting the implementation of the merger on national security grounds.

 

(13)
(a) The Committee may revoke its approval of the merger or, in respect of a conditional approval, make any appropriate decision regarding any condition relating to the merger, if—
(i) the approval was based on incorrect information for which a party to the merger is responsible;
(ii) the approval was obtained by deceit; or
(iii) a firm concerned has breached an obligation attached to the approval.
(b) If the Committee revokes its permission in terms of paragraph (a), the Competition Commission’s or Competition Tribunal’s approval or conditional approval of the merger is deemed to be revoked.
(c) Unless the Committee determines otherwise, the Competition Commission’s or Competition Tribunal’s approval or conditional approval of a merger involving a foreign acquiring firm is deemed to be revoked if the foreign acquiring firm failed to notify the Committee in terms of subsection (6).

 

(14) The Competition Tribunal may impose an administrative penalty, in accordance with the provisions of section 59(3), on the parties to a merger involving a foreign acquiring firm for any contravention contemplated in section 59(1)(d), read with the changes required by the context.

 

(15) The President may delegate any power or function conferred on him or her under subsection (3) or (4) to any Cabinet Member.

 

[Section 18A inserted by section 14 of Notice No. 175, GG 42231, dated 14 February 2019]

 

 


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