JD Group Limited and Profurn Limited v Competition Tribunal, Republic of South Africa

The Competition Tribunal approved a large merger between JD Group Limited and Profurn Limited subject to conditions. These conditions restricted the merged entity, for a period of three years, from reducing the proportion of furniture purchased from independent manufacturers (defined as manufacturers other than Steinhoff International Holdings Ltd) below pre‑merger levels. The Tribunal imposed the conditions due to concerns about the vertical effects of the merger, particularly the potential strengthening of Steinhoff’s dominance as a furniture manufacturer through increased purchasing by the merged retail entity. JD Group and Profurn appealed to the Competition Appeal Court, contending that the conditions were speculative, unsupported by evidence, and improperly interfered with commercial decision‑making. Steinhoff separately launched a review application challenging the conditions.

The appeal was upheld. The Competition Tribunal’s order approving the merger subject to conditions was set aside and replaced with an order approving the merger unconditionally. The review application brought by Steinhoff became moot and was not considered.

This case is significant for clarifying merger control principles under South African competition law. It underscores the necessity of properly defining the relevant market, the prohibition on speculative reasoning, and the requirement that merger conditions must be evidence‑based, rational, and directed at protecting competition rather than competitors. It also affirms the structured enquiry mandated by section 12A of the Competition Act.