Sun International’s plans for Peermont suffer a blow

THE Competition
Commission (CC) has
recommended to the
Competition Tribunal that the
proposed merger, whereby Sun
International SA (SISA) intends
to acquire Peermont Global, be
prohibited.
“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.” The CC
says the 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 of
the Competition Commission,
Hardin Ratshisusu.
“This merger would have
created a highly concentrated
market structure in Gauteng,
thereby substantially lessening
competition. He argued that
Peermont’s initial opposition
to the relocation of Sun
International’s Morula Casino
indicated that its introduction
into central Gauteng would
increase competition
substantially. If Sun
International owns Peermont,
the competition – even in this
instance – would subside. The
approval of the Tribunal is a
condition of the transaction
and Sun International will meet
with the CC in June.