Genesis Analytics played a key role as expert economists in the ruling by the Competition Appeal Court (CAC) that approved the merger between DuPont Pioneer, a US-based international developer and supplier of plant genetics, and Pannar, a family firm based in KwaZulu-Natal, subject to several conditions.
The Supreme Court of Appeal has since rejected an application by the Competition Commission, which sought leave to appeal the decision by the CAC to overturn the prohibition thereby endorsing the CAC’s conditional approval of the proposed merger.
The merging parties had appealed against the prohibition of the proposed merger by the Competition Commission (Commission) in 2010, and again by the Tribunal at the end of 2011.
Genesis was fully involved in the economic assessment of the counterfactual to the implementation of the proposed merger as well as assessing the anticipated efficiencies that would result from the merger. For example, with respect to the counterfactual, the CAC agreed with Genesis that the firms identified by the Commission as possible suitable bidders for Pannar absent a merger with Pioneer, were mismatched by virtue of attributes of their products and own strategy, and thus improbable merger candidates. Ultimately, the CAC was in agreement with Genesis that absent the merger with Pioneer, Pannar would continue to decline and a vital, local source of maize germplasm would have eventually been lost.
Genesis also played an advisory role in formulating the conditions that the CAC eventually accepted including: (i) a cap on price increases for Pannar maize hybrids and open pollinated maize varieties for three years, and (ii) that subsistence farmers will not suffer a price increase for three years and thereafter increases capped at CPI for five years.