Original Research

On merger simulation and its potential role in south african merger control

Liberty Mncube, Hardin Ratshisusu, Bheki Dlamini
South African Journal of Economic and Management Sciences | Vol 13, No 1 | a198 | DOI: https://doi.org/10.4102/sajems.v13i1.198 | © 2011 Liberty Mncube, Hardin Ratshisusu, Bheki Dlamini | This work is licensed under CC Attribution 4.0
Submitted: 26 April 2011 | Published: 04 May 2011

About the author(s)

Liberty Mncube, Competition Commission South Africa, South Africa
Hardin Ratshisusu, Competition Commission of South Africa, South Africa
Bheki Dlamini, Competition Commission of South AFrica, South Africa

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Abstract

This paper simulates the price effects of the proposed Ferro Industrial Products (Ferro) and Powder-Lak merger in order to suggest the role that merger simulation models should play in South African merger control. Merger simulation can provide support to the Commission’s analysis by; focusing parties’ attentions on verifiable economic arguments; making transparent the values of the key parameters and assumptions in the Commission’s analysis; producing quantitative estimates of the results of a given transaction; and indicating the amount of resources to allocate to proposed merger cases. However, it offers only one piece of evidence in a case and its results must be interpreted with an understanding of the potential limitations.

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