The Competition Commission has recommended to the Competition Tribunal that the proposed merger, whereby Sun International South Africa (Sisa) intends to acquire Peermont Global, be prohibited.
In a statement, the Commission said it was concerned that, if allowed, the acquisition was likely to give rise to significant competition concerns in the central Gauteng gambling market.
“The acquisition will result in increased concentration levels in an already highly concentrated industry,” the Commission said. “Furthermore, the central Gauteng gambling market will be left with only two major competitors – Sisa and Tsogo Sun Holdings – as a result of the transaction.”
According to the Commission, this reduction in the number of competitors may lead to Tsogo Sun and Sisa co-ordinating their behaviour to the detriment of consumers.
“The gambling industry is significant in the South African economy, with high barriers to entry as it is regulated by the various gambling boards,” said acting deputy commissioner, Hardin Ratshisusu.
“This merger would have created a highly concentrated market structure in Gauteng, thereby substantially lessening competition. The imminent relocation of the Morula Casino to central Gauteng will substantially increase competition as evidenced, at least, by the initial opposition to the relocation by Peermont, the target firm in this instance,” he said.
