Pepkor Holdings Limited and Another v Lewis Stores Proprietary Limited

Pepkor Holdings Limited sought to acquire the furniture business of Shoprite Holdings Limited (the proposed merger). During the large merger proceedings before the Competition Tribunal, Lewis Stores (Pty) Ltd applied for and was granted wide-ranging rights of intervention by the Tribunal on 23 July 2025. Lewis argued that the Competition Commission had materially erred in its market analysis by including independent and regional players as competitive constraints when only three firms (Pepkor, Shoprite Furniture, and Lewis) competed nationally, making it a '3-to-2 merger' likely to result in unilateral effects. Lewis also raised concerns about market share understatement, buyer power, and public interest issues including employment and HDP participation. The Tribunal granted Lewis comprehensive intervention rights including access to confidential records, discovery, subpoena powers, cross-examination, and the ability to lead expert evidence. The merging parties appealed this order and applied for its suspension pending the appeal, arguing that it would result in premature disclosure of confidential and competitively sensitive information to a direct competitor.

• Whether the Tribunal's order granting intervention rights is appealable under the Competition Act
• Whether section 38(2A)(d) of the Competition Act permits suspension of the Tribunal's order pending appeal
• What the appropriate scope and limits of intervention rights are in merger proceedings
• Whether the interests of justice warrant suspension of the intervention order
• What the permissible scope of intervention is vis-à-vis the statutory mandate of the Competition Commission

The operation and execution of the Competition Tribunal's order dated 23 July 2025 granting Lewis Stores (Pty) Ltd rights of intervention in the merger proceedings was suspended pending determination of the appeal set down for 17 September 2025. Lewis Stores (Pty) Ltd was ordered to pay the costs of the application, including the costs of two counsel.

The binding legal principles established are: (1) Orders of the Competition Tribunal granting intervention rights are appealable where the interests of justice warrant appellate scrutiny, particularly where such orders fundamentally alter the nature of proceedings or bear on their integrity or structure, applying the Lebashe test rather than the Zweni finality test; (2) Intervention rights in merger proceedings must be circumscribed and tailored to supplement, not supplant, the Commission's statutory investigative mandate - intervention may assist the Tribunal but cannot displace the Commission's role; (3) Intervention rights must be tethered to a defined theory of harm and cannot be plenary or indistinguishable from the Commission's own powers; (4) In suspension applications under section 38(2A)(d) of the Competition Act, courts must consider: (i) whether an appeal is pending; (ii) prospects of success; (iii) balance of convenience; and (iv) the interests of justice; (5) Irreversible prejudice from disclosure of confidential and competitively sensitive information to a direct competitor weighs heavily in the balance of convenience, and cannot be adequately neutralized by confidentiality undertakings; and (6) Invoking statutory suspension mechanisms vindicates rather than undermines the rule of law.

The Court made several non-binding observations: (1) The reliance by Lewis on the JD Group/Ellerine Holdings precedent was noted as potentially outdated, with more recent jurisprudence such as TFG Furnishings v Tapestry Home Brands supporting a broader approach to market definition considering consumer behaviour and local contestability; (2) The Court observed that the merger raised substantive issues about whether the market analysis should focus on national competitors only (the '3-to-2 merger' theory) or consider a more fragmented and contested market including regional and independent players; (3) The Court noted Lewis's allegation that the merger's rationale was to give Pepkor scale to exercise buyer power over suppliers, suggesting this was part of the substantive dispute to be determined; (4) The Court observed that to compel compliance regardless of a pending and arguable appeal would render the suspension mechanism nugatory; and (5) The Court commented that the appeal raised systemic issues including the permissible scope of intervention, treatment of confidential information, and the balance between transparency and protection in merger control, suggesting these broader policy considerations were relevant to the interests of justice.

This judgment is significant in South African competition law for several reasons: (1) It clarifies the appealability of Tribunal intervention orders, applying the Constitutional Court's Lebashe test rather than the restrictive Zweni test, thereby expanding access to appellate review in competition matters; (2) It establishes important principles regarding the permissible scope of intervention in merger proceedings, emphasizing that intervention rights must be circumscribed and tailored to assist the Tribunal without displacing the Commission's statutory mandate; (3) It affirms the importance of protecting confidential and competitively sensitive information in merger proceedings, particularly where disclosure would be to a direct competitor; (4) It demonstrates the proper application of section 38(2A)(d) suspension powers, balancing irreversible prejudice against procedural convenience; (5) It contributes to the ongoing jurisprudence on intervention rights in competition proceedings, building on African Data Centres and Caxton principles; and (6) It reinforces that using statutory suspension mechanisms is consistent with, not contrary to, the rule of law.