Drum makers lobby tribunal

A Dutch steel-drum manufacturer and its SA counterpart, which have been trying unsuccessfully to merge over the past 14 years, will finally argue their case before the Competition Tribunal on Friday.

A Dutch steel drum manufacturer and its South African counterpart, which have been trying unsuccessfully to merge over the past 14 years, will finally argue their case before the Competition Tribunal on Friday.

The two want the tribunal to reconsider a decision by the Competition Commission, which rejected their proposed merger. Greif International and Rheem SA will now make proposals to address a number of concerns that the commission raised about the deal’s anticompetitive effect.

As an adjudicative body, the tribunal may review the commission’s decisions.

The tribunal hearings follow the commission’s decision in June 2017 to block – for the second time – the transaction between the two companies. The antitrust body first prohibited the deal, which involved Greif acquiring control of Rheem, in 2004. Greif, a Dutch company, manufactures and supplies industrial packaging and services with a range of rigid packaging products such as steel, plastic and fibre drums, intermediate bulk containers and plastic water bottles.

In SA, Greif manufactures and sells steel drums, steel pails, blow-moulded plastic drums and knock-down drums. Rheem is a privately-owned industrial packaging company which makes steel drums, cans and pails mainly used for packaging industrial liquids and hazardous chemicals.

The deal would have resulted in Greif’s acquisition of an empowered company with a level-3 BEE status. The commission rejected the proposed merger on the grounds that Greif and Rheem were the only manufacturers of steel drums in KwaZulu-Natal and Gauteng.

“The commission has again assessed the market and found the transaction would effectively be a merger to monopoly, regardless of the geographic markets considered,” the commission said when it rejected the merger in June 2017.