Competition Appeal Court revokes Lewis' right to intervene in Pepkor-Shoprite merger

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The judgment provides important guidance on the appropriate limits to third party intervention in merger proceedings under the Competition Act, 89 of 1998, as amended. It emphasises that intervention must be tailored and that the role of an intervenor is not to supplant the Competition Commission’s (Commission) investigative functions.

Further, the admission of intervenors must be assessed in terms of the need to balance the expeditious resolution of any merger inquiry against the contribution that an intervenor has shown it can make to the merger inquiry. This requires an intervenor to demonstrate that it has concrete, non-speculative evidence that would not otherwise be available to the Tribunal and which will assist the Tribunal in properly determining the likely effects of the merger.

Background

The merger involves Pepkor’s proposed acquisition of Shoprite’s furniture business. Pepkor is the largest household furniture retailer in South Africa, while the target business is the third largest.

The Commission recommended that the merger be approved subject to public interest conditions relating to employment and procurement from local furniture suppliers.

Lewis sought to intervene on the basis that it had a material and substantial interest in the merger proceedings by virtue of it being a competitor to the merging parties.

Lewis considered the Commission’s entire competitive analysis to be flawed: it was of the view that it could provide the Tribunal with ‘extensive evidence and unique insights’ regarding market definition, competitive dynamics in the furniture retail sector, the anti-competitive effects likely to arise from the merger, potential remedies and the negative public interest effects of the merger.

The merging parties opposed this application.

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The Tribunal nevertheless granted Lewis’s intervention application on the basis that it would be able to assist the Tribunal with issues of market shares, customer preferences, information on local markets in which the merging parties’ stores overlap and the role of online sales.

Lewis’s rights of intervention included rights to participate in all prehearing conferences, full discovery rights, the right to require the Tribunal to summon individuals and documents, full participation rights in any interlocutory proceedings, the right to adduce evidence and present argument and the right to cross examine any witnesses.

Further, the Tribunal granted Lewis’s advisors the rights to access the merger record and all documents filed in the proceedings in circumstances where portions of the record were confidential.

The merging parties appealed the Tribunal’s decision to the CAC.

Suspension of the Tribunal’s order

On 29 August 2025, the CAC ordered the suspension of the Tribunal’s order pending the determination of the merging parties’ appeal against the Tribunal order. While this CAC decision suspended the Tribunal’s order on an interim basis only, until the CAC’s decision of the merging parties’ appeal, the CAC referred to previous decisions in which the CAC has recognised that intervention:

• is permissible but within limits tethered to the intervenor’s theory of harm; and
• must be circumscribed, to assist the Tribunal without displacing the Commission’s statutory mandate to investigate a merger.

The interim suspension was sought to prevent the disclosure of the merging parties’ confidential and competitively sensitive information that would have to be disclosed if the merging parties complied with the Tribunal’s order.

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Setting aside of the Tribunal’s order

On 8 October 2025, the CAC found that the Tribunal had failed to exercise its discretion judicially and upheld the merging parties’ appeal and set aside the Tribunal’s decision, replacing it with an order dismissing Lewis’s intervention application.

The CAC’s decision highlights that:

• Intervention standard in mergers: An applicant must demonstrate its possession of concrete, non-speculative evidence that would not otherwise be available to the Tribunal and which will assist the Tribunal in properly determining the likely effects of the merger. A mere commercial interest is insufficient.
• Balancing test: The Tribunal must weigh the likelihood of assistance against the cost, delay, and complexity that intervention may introduce. This is particularly the case where an intervenor is a competitor who may be advancing its own commercial interests. ‘Stalingrad’ tactics have no place in merger proceedings, which must be expeditious.
• Scope of rights: Even if intervention is allowed, procedural rights are not automatic; the intervenor must motivate for each right as necessary to advance the basis for its intervention.
• Inquisitorial powers: The Tribunal has inquisitorial powers that can be used to summon a party to appear before it to provide any information relevant to a proposed merger (as opposed to that party participating as an intervenor), or to direct the Commission to gather and present additional evidence.

Takeaways

• Potential intervenors: Must demonstrate possession of concrete, non-speculative evidence that would not otherwise be available to the Tribunal and which will assist the Tribunal in properly determining the likely effects of the merger.
• Merging parties: Expansive, trial-like interventions are susceptible to being set aside, particularly where they undermine the expeditious resolution of a merger inquiry. The Tribunal is empowered to call for additional evidence from the Commission or market participants – which may eliminate the ‘value’ that a potential intervenor may offer.