Weelee can 'intervene' in WeBuyCars deal with Naspers subsidiary, Tribunal finds

Weelee is allowed to "intervene" in a Competition Commission case relating to a proposed deal between WeBuyCars and Naspers-controlled MIH eCommerce, the Competition Tribunal ruled on Tuesday.

Weelee is an online intermediary which facilitates the sale of used vehicles by private individuals to second-hand vehicle dealers. It is a competitor of online car retailer WeBuyCars.

MIH eCommerce is mainly an investment holding company and has investments in online classifieds marketplace OLX as well as Naspers subsidiary Car Trader, which operates as AutoTrader.

Naspers announced in September last year that OLX would invest R1.4bn in WeBuyCars. MIH eCommerce wants to acquire 60% of WeBuyCars.

The Competition Commission assesses large mergers before referring them to the Tribunal for a final decision.

Although the Commission found in May that the proposed transaction did not present any horizontal competitor overlap in South Africa, it nevertheless recommended to the Tribunal that the deal be prohibited.

In the Commission's view, the proposed deal could stop other businesses with similar activities from entering the market or markets, and the resultant "merged entity" would dominate any competitors.

Weelee has already been called as a witness for the Commission in its case. It believes, however, that its status as a mere witness in the Commission's case would not have afforded it sufficient protection over its own interests.

It therefore opted to apply last week to be recognised as an "intervenor" in the merger proceedings.

WeBuyCars and MIH Ecommerce opposed Weelee's application.

In terms of the Tribunal's order, its participation in the Commission's case opposing the merger will include the right to access the Commission's records and any additional documents filed by WeBuyCars and MIH eCommerce. This will, however, be subject to standard confidentiality arrangements.

Weelee would also be allowed to lead the evidence of its CEO, but this will be limited to what is contained in his witness statement and to the extent that the evidence has not been led by the Commission.

Furthermore, Weelee would be allowed to cross-examine witnesses called by WeBuyCars and MIH eCommerce, but only where this would not duplicate the Commission's cross-examination.

Weelee must also stick to the Tribunal's existing timetable for the hearing, which is set to start on October 14.

MIH eCommerce and WeBuyCars plan to oppose the Commission's prohibition recommendation.

* Fin24 is part of Media24, a subsidiary of Naspers.

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