The Competition Commission welcomes the amended Merger Threshold Determination and Merger Filing Fees that were gazetted on May 8.

Its research indicates that the revised thresholds can materially reduce merger notifications without compromising competition or public interest enforcement, thereby improving the efficiency of the merger control regime.

These amendments follow a detailed review by the commission of how the merger control system is working in practice.

The revised thresholds are an intervention to reduce red tape and ensure that mandatory notification remains focused on the transactions that are most likely to raise competition or public interest concerns, it says.

In reviewing the thresholds, the commission conducted a review of merger activity over two financial years to assess how many notifications would likely fall away under substantially revised thresholds, what this would mean for fee revenue, and whether any competition or public interest concerns could be missed.

The findings showed that a significant drop in notifiable mergers is possible without weakening enforcement, particularly because many transactions that would fall below the new thresholds were previously approved without conditions, the commission says.

A lower volume of routine filings will enable the commission to direct specialist resources to more complex mergers. This will strengthen the quality and timeliness of assessments where risks to competition and the public interest are most pronounced.

Additionally, the amendments follow a government-wide commitment to reducing red tape and improving efficiency in support of government’s pro-growth, investment-focused agenda.

The revisions to the merger notification thresholds keep the system proportionate, investor-friendly, and focused on transactions that warrant closer scrutiny. They were previously updated in 2017.

Specifically, the lower threshold for merger notification was increased to R1-billion combined turnover or asset value of the post-merged organisation and R200-million turnover or asset value for the targeted company.

The upper threshold was increased to R9.5-billion combined turnover or asset value and R280-million turnover or asset value of the targeted company.

The previous numbers were R600-million combined turnover and R100-million target's turnover, for the lower threshold, and R6.6-billion combined turnover and R190-million target company's turnover.