Subject category:
Strategy and General Management
Published by:
Wits Business School - University of the Witwatersrand
Length: 24 pages
Data source: Published sources
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Abstract
There were a number of factors that made the chemical and plastics industry a poor performer in South Africa during the late 1990s. The industry was, for example, channelled with the decrease in import tariffs in 1996. With South Africa's acceptance into the global economy after the abolition of trade sanctions and the election of a democratic government in 1994, the old inwardly focussed policy of import substitution was replaced by new export oriented strategies based on making industries more internationally competitive. As a result of these challenges, AECI's very existence was threatened, and Sasol needed to become more internationally competitive. In 1998, Sasol consulted with the Competition Board in order to gain approval of a merger with AECI. The merger would bring about economies of scale and create a globally competitive explosives giant within the South African borders. This case presents the decision process that the Competition Board needed to make as it considered issues of market dominance, decrease in competition, and public interest.
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Abstract
There were a number of factors that made the chemical and plastics industry a poor performer in South Africa during the late 1990s. The industry was, for example, channelled with the decrease in import tariffs in 1996. With South Africa's acceptance into the global economy after the abolition of trade sanctions and the election of a democratic government in 1994, the old inwardly focussed policy of import substitution was replaced by new export oriented strategies based on making industries more internationally competitive. As a result of these challenges, AECI's very existence was threatened, and Sasol needed to become more internationally competitive. In 1998, Sasol consulted with the Competition Board in order to gain approval of a merger with AECI. The merger would bring about economies of scale and create a globally competitive explosives giant within the South African borders. This case presents the decision process that the Competition Board needed to make as it considered issues of market dominance, decrease in competition, and public interest.