PRINTING: Confusion At Paarl Media
Recent Western Cape Business News
Paarl Media and Primedia say they are astounded by the decision by the Competition Commission yesterday to reverse the unconditional approval it gave in January 2011 regarding the acquisition by Paarl Media of Primedia@Home.
“Our legal teams have studied the decision, and it has been decided to refer the matter to the Competition Tribunal to reconsider the Commission's decision,” said Stephen van der Walt, CEO of Paarl Media and Geraint Crwys-Williams, Group Commercial & Legal Executive at Primedia.
In a joint statement the representatives of the respective companies said: “When the Competition Commission completely reverses its own decision on the same set of facts, the resulting commercial anarchy bodes ill for economic growth and jobs in future. Any attempt to undo the merger will mean the loss of over a thousand jobs. With this inexplicable reversal the reputation of the Competition Commission suffers a grievous blow.”
The companies said the Competition Commission has now prohibited a merger which has already been fully implemented, with the knowledge and approval of the Competition Tribunal. As the Tribunal recognised in its ruling in July 2011, Paarl Media was legally entitled to integrate Primedia@Home into its Shoppers Friend operation after voluntarily notifying the transaction to the Commission and receiving unconditional approval from the Commission in January this year.
Paarl Media and Primedia do not believe it is practically possible to reverse a merger process which has been completed, and even if a reversal were possible, Primedia has no intention of resuscitating the Primedia@Home operation.
“We have already implemented the merger, and the considerable investments we have made have been a success. How does the Commission expect us to undo this, and who will compensate the affected employees for the loss of their jobs and us for the expense we have incurred legally, and with the endorsement of the Competition Tribunal, after the Commission gave us unconditional approval? ” asked Van der Walt.
“In our view the Commission’s decision is incapable of being implemented – you cannot unscramble an omelette.
“This illogical and incomprehensible ruling is going to make business question the validity of every decision the Competition Commission has made in the past as well as the permanence of decisions made in the future. In the space of 10 months the Commission has delivered completely opposite decisions on the same facts.
“The Commission's decision will cost more than 1 000 jobs if it is implemented. It is a waste of resources, it is bad for business and it does great damage to the public good.
“This transaction was below the financial thresholds where notification was required. We did so voluntarily because it was good corporate governance. The way the matter has been handled is likely to make other companies do everything they can to avoid South Africa's competition procedures.
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