8
Judgment No. SC 52/18
Civil Appeal No. SC 560/17
acquired a controlling interest in a supplier of commodities or distributor of services. That was
a vertical merger.
The definition was amended in 2001 by Act 29 of 2001. Section 2 of the Act as
amended now defines a merger as follows:
“’merger’ means the direct or indirect acquisition or establishment of a controlling
interest by one or more persons in the whole or part of the business of a competitor,
supplier, customer or other person whether that controlling interest is achieved as a
result of — …”. (the emphasis is mine)
The Legislature’s intention in amending the definition of merger could not have been
to cover the vertical and horizontal mergers only, as originally provided for under the 1996
Act. The addition of the words “or other person” to the substance of the definition was intended
to broaden the definition to include mergers between parties who did not fall within or were
not sharing any characteristics with those in the categories of competitor, supplier and
customer. The meaning of “merger” was broadened to cover a situation where one or more
persons acquired or established a controlling interest in an undertaking not falling within the
categories of a competitor, supplier or customer.
What determines the applicability of the definition of “merger” for purposes of the Act
is the existence of a controlling interest by one or more persons in the whole or part of the
business of another person. The definition is inclusive. In other words, the definition was
deliberately widened to include all types of mergers. Without the words “or other person”, the
definition of “merger” would have been exhaustive as it would apply only to businesses or
undertakings falling within each of the categories specifically stated. The word “other”
describes a person who would not belong to any of the categories of persons specifically
mentioned.