Isenbourg SGPS, LDA, RT-MART International Ltd. and TRANS ASIA Development Corporation applied for merger approval
Case:
Isenbourg SGPS, LDA, RT-MART International Ltd. and TRANS ASIA Development Corporation applied for merger approval
Key Words:
merger, wholesale warehousing, foreign business entities
Reference:
Fair Trade Commission Decision of January 18, 2001 (the 481st Commissioners' Meeting); Decision (90) Kung Chieh Tzu No. 061
Industry:
Wholesale (4754)
Relevant Laws:
Summary:
1. RT-MART's acquisition of shares of Trans Asia Development and acquisition of shares of Isenbourg is the type of merger defined in Article 6(1)(ii) of the Fair Trade Law. The participating parties applied to the Fair Trade Commission (FTC) for approval to combine under Article 11(1)(iii) of the Fair Trade Law. 2. The application relates to RT-MART's acquisition of shares of Trans Asia Development and acquisition of shares of Isenbourg. The FTC finds that RT-MART and Trans Asia Development own only 1.08% and 4.2% of the wholesale market shares respectively. The merger between RT-MART and Trans Asia is merely an internal transfer of shares within one enterprise. Further, Isenbourg did not operate any wholesale stores or generate any sales volume in Chinese Taipei's market for 1999. Therefore, the merger of RT-MART, Trans Asia Development and Isenbourg will not create a substantial effect on Chinese Taipei's wholesale market and their respective market shares. Therefore, there is no likelihood that the merger would restrain competition. 3. Currently, the number of domestic wholesalers is increasing at 15% per annum. The competition among wholesalers is stiff. After the said merger, RT-MART may gain a competitive edge by entering into alliance with Isenbourg. Isenbourg may contribute to this allied relationship its international buying channels and logistical management, operational procedures of purchasing, staff training, and technical support. Further, RT-MART and Trans Asia Development have solid experience in the management of wholesale business and adequate knowledge of Chinese Taipei's wholesale market. After the said merger, the parties may integrate and re-organize their human and financial resources. With Isenbourg's sophisticated management style, the parties may improve their operational efficiency to provide a more global and sophisticated wholesale market environment for Chinese Taipei. The parties may utilize their current resources and fixed assets, equipment, and labor to expand the size of their operation, reduce o verheads, and achieve cost-effectiveness. After the merger, Isenbourg's management strategy of "buying at low prices" will be an effective way to reduce sales prices, introduce home-made brands, expedite entry for the parties to the e-commerce market, and monitor practices in the management of wholesale business. The merger may bring overall economic benefits to the market by adapting retail market trends, enhancing foreign investors' willingness to invest in the local market, combining local and foreign entrepreneurial expertise, and expanding the magnitude of existing business operations. 4. Based on the above analysis, the overall economic benefits of the merger that are expected to derive from RT-MART's acquisition of shares of Trans Asia Development and acquisition of shares of Isenbourg outweigh any potential adverse restraints on competition in the market. The FTC therefore grants its approval for merger under Article 12 of the Fair Trade Law. Appendix: RT- MART International Ltd.'s Uniform Invoice Number: 97165560 Summarized by Tsai, Yi-Chun; Supervised by Chen, Yuhn-Shan