COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 46/LM/May08
In the matter between:
TATA Motors Ltd Acquiring Firm
and
Jaguar Land Rover Target Firm
Panel : D Lewis (Presiding Member), Y Carrim (Tribunal
Member) and U Bhoola (Tribunal Member)
Heard on : 30 May 2008
Order issued on : 30 May 2008
Reasons issued on : 26 June 2008
Reasons for Decision
Introduction
1]On 12 June 2008 the Tribunal approved the acquisition by TATA Motors Ltd
of the Jaguar and Land Rover businesses of Ford Motor Company. The
reasons follow below.
The transaction and parties
2]TATA Motors Ltd (“TATA Motors”) is acquiring the Jaguar and Land Rover
businesses of Ford Motor Company (“Ford”).
3]TATA Motors is an India based company which manufactures and supplies
passenger cars, commercial vehicles and buses, primarily in India. The
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largest shareholder in TATA Motors is TATA Sons Ltd which, together with its
affiliates, own approximately to 33.4% of the issued share capital in TATA
Motors.
4]The Jaguar and Land Rover businesses are controlled by Ford, a public
company listed in New York and the Pacific Stock Exchanges in the United
States, as well as stock exchanges in Belgium, France, Germany,
Switzerland and United Kingdom. Ford is not controlled by any single
shareholder.
Rationale for the transaction
5]According to TATA Motors the acquisition is part of its growth strategy to
enter the midpriced and premium passenger vehicle segments where it has
limited presence. Ford indicated that it wants to focus on its core Ford brand.
Effect on Competition
6]TATA Motors supplies passenger cars and light commercial vehicles to South
Africa. It does not manufacture any vehicles in South Africa nor does it import
vehicles on behalf of any other vehicle manufacturers. The vehicles supplied
by TATA are passenger cars within the entry level, the small and the lower
middle vehicle segments as well as the lower middle utility segment, also
referred to as SUV’s. It also sells light commercial vehicles (“LCVs”) in South
Africa.1
7]The Jaguar brand is described as premium or luxury passenger and sports
cars and the Land Rover brand as four wheel drive offroad utility vehicles or
SUV’s which fall within the upper middle vehicle segment. TATA also
supplies SUVs, however, TATA’s utility vehicles can be distinguished from
Land Rover’s brands with regard to price and performance. TATA focuses on
the lower middle utility segment while Land Rover’s SUVs, as stated above,
are classified as upper middle segment.
1 The parties indicated that the Land Rover brand in certain cases could be converted and
sold as LCV’s.
2
8]It therefore follows that within the narrow product markets in which the parties
supply vehicles namely the lower middle and upper middle SUVs market and
the commercial LCV market there are no product overlap. If one considers
the effect of the transaction on the broad market for the supply of passenger
vehicles one finds that the market share of the merged entity is very small,
3.2%, and thus unlikely to have a negative effect on competition post the
transaction.
PUBLIC INTEREST
9]The transaction does not raise any significant public interest concerns.
CONCLUSION
10]We therefore find that the transaction is unlikely to substantially prevent or
lessen competition in the relevant product markets.
____________________ 26 June 2008
Y Carrim Date
D Lewis and U Bhoola concurring.
Tribunal Researcher: R Badenhorst
For the merging parties: Webber Wentzel Bowens
For the Commission: K Mahlakoane and X Nokele
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