Expert evidence in successful seed merger

Genesis was appointed to provide economic analysis to Pioneer Hi Bred International and Pannar Seed in a case before the Competition Appeal Court. This concerned the prohibition of a proposed horizontal merger relating to the breeding, commercialisation and distribution of hybrid maize seed.

The Competition Commission had recommended a prohibition of the merger, which the Competition Tribunal had agreed with. The commission’s concern had been that the merger would result in significant and anti-competitive unilateral price increases.

Although the transaction amounting to a three-to-two horizontal merger, the analysis provided by the project team assisted in demonstrating that it would not have any significant anti-competitive effects and, furthermore, that it would result in dynamic efficiencies due to the complementary technologies used by Pioneer Hi Bred International and Pannar Seed.

The team also assisted in the development of an amenable price remedy relating to the supply of hybrid seed in order to address the concerns regarding potential harm to consumers, especially developing farmers.

The Competition Appeal Court overturned the prohibition and granted approval for the transaction.