CC2016/01 Barzeva, K. and Grimbeek, S.(2016). The effectiveness of merger control in South Africa: selected case studies.

This paper seeks to examine the effectiveness of merger control decisions in South Africa in achieving the economic goals of merger control by using event study techniques to assess the impact of mergers and acquisitions on the share value of listed firms in South Africa. We look at selected case studies in the food and agro-processing sector where listed firms on the JSE were involved in merger transactions that were either prohibited, conditionally approved or approved outright by the South African competition authorities. Our results indicate that across all of the selected case studies it generally takes time for the market to react to key events analysed in our case studies. More specifically, we found that after the SENS announcement the cumulative abnormal returns were positive across our sample, save for the Aspen/Pfizer case study. In cases where the Commission decided to conditionally approve or prohibit transactions, the firms in question experienced statistically significant negative abnormal returns on their share prices.