Competition authority ‘collapse’ is blocking major business deals – Davis

Retired judge Dennis Davis, former president of the Competition Appeal Court, has warned of what he describes as an “almost significant collapse of the competition authorities in South Africa”, saying it is preventing businesses from buying other firms.

“You can’t get a merger through any longer … because the system has collapsed now,” he says.

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Davis was speaking to former finance minister Trevor Manuel at Ninety One’s Beyond Alpha 2026 conference, where they discussed the gap between South Africa’s “Rolls-Royce legislation” and the country’s ability to implement it effectively.

Asked by Moneyweb to clarify his comments, Davis says he knows of businesses that decided against acquisitions because of the time it takes to obtain competition approval.

“Mergers have to be done urgently because markets change. So if you can’t get the merger done in two or three or four months … you walk away.”

“And what’s happened is people are going to other countries in Africa – saying they give us permission, or we get a decision far quicker.”

When asked what he means by a collapse, Davis says his concerns centre on two issues: one “jurisprudential”, relating to the law, and the other “institutional”.

Tribunal under-resourced

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On the institutional side, Davis says the Competition Tribunal is under-resourced and doesn’t have enough lawyers, meaning you can’t get hearings expeditiously.

“This is not a criticism [of the tribunal].

“I’m just saying I do not understand why the Department of Trade, Industry and Competition has not been able to ensure [the] attraction of further people.

“If you’ve got a merger, which is a matter of urgency, you have to get it done quickly and if you don’t have enough people, [you can’t].”

Read: Expert insights on SA’s revised M&A regulations

In South Africa, large mergers require approval from the competition authorities when the target firm’s value is R280 million or more and the combined annual turnover of the two firms is R9.5 billion or more.

The Competition Commission makes a recommendation on whether a merger should proceed, while the Competition Tribunal, which acts like a court, decides whether the transaction can go ahead.

Legal challenges delay deals

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Davis’s second concern is the legal precedent that he says allows rival firms opposed to a transaction to drag out the approval process by years.  

He cited the acquisition of Shoprite’s furniture businesses, OK Furniture and House & Home, by Africa’s largest clothing retailer Pepkor for R3 billion in September 2024.

The deal has yet to be completed.

Furniture retailer Lewis sought permission to intervene, arguing that the merger could raise competition and pricing concerns.

Read:

Shoprite sells House & Home and OK Furniture to Pepkor [2024]
Pepkor-Shoprite Furniture merger gets provisional green light [2025]

The tribunal allowed Lewis to intervene on a limited basis – a decision overturned by the Competition Appeal Court. The case went all the way to the Constitutional Court, which in late 2025 allowed Lewis to intervene.

Davis acknowledges that he had a role in the case as a Competition Appeal Court judge, but says the Constitutional Court judgment had created a precedent that makes it easier for parties wishing to obstruct a merger to intervene.

He says he was not speaking specifically on the merits of the Lewis case. 

“Basically, if you are given the right to intervene … you can then start asking for discovery and by making the whole process so slow, parties will think twice about actually entering into a merger.”

“I know for a fact that all sorts of mergers are not taking place in South Africa precisely because of those problems.” 

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Manuel: Laws aren’t enough

The discussion broadened to South Africa’s wider regulatory capacity, with Davis arguing that the country needs to regulate effectively without regulation becoming a barrier to economic development.

Manuel pointed out that another challenge relates to the damage caused “during the Zuma years”, which he says drove skilled people out of regulatory institutions.

He says South Africa has the right legislation in place but it is not implemented.

He gave the example of the Financial Intelligence Centre Act, which has been in place since 2001 to deter money laundering, but suggests there are still risks of South Africa returning to the Financial Action Task Force (FATF) grey list in future despite these laws. 

“I’m sure those guys are sitting in Paris [FATF headquarters] watching the Madlanga [Commission] like we do, and saying ‘Are the cops that bad and that corrupt?’

“We need a prosecutorial service that will be larger, more dynamic, and capable of not just bringing cases to court, but also ensuring successful prosecution.”

Read:

National Treasury submits fifth compliance report to the FATF
SA faces tougher FATF review as Madlanga allegations mount

The FATF’s inspection, which runs until 2027, will test not just the adequacy of South Africa’s anti-money-laundering laws, but also whether authorities can investigate and effectively prosecute complex financial crimes.

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