Lewis Stores v Pepkor: A Major Reset in Competition Merger Jurisprudence
In Lewis Stores (Pty) Ltd v Pepkor Holdings Ltd and Others [2026] ZACC 4, the Constitutional Court of South Africa delivered an important judgment reaffirming the proper test for third-party intervention in large merger proceedings and curbing appellate overreach into the discretion of the Competition Tribunal 4.
The decision has significant implications for competitors, suppliers, trade unions, public-interest bodies, and other stakeholders seeking to participate in merger hearings under the Competition Act 89 of 1998.
Background to the Dispute
The matter arose from a proposed large merger in which Pepkor Holdings Limited sought to acquire Shoprite Holdings Limited’s OK Furniture and House & Home divisions. Following an investigation, the Competition Commission recommended conditional approval of the merger.
Lewis Stores, a national furniture retailer and competitor in the low- to middle-income market segment, applied to the Competition Tribunal for intervention rights, arguing that the merger raised serious competition concerns, particularly in relation to market concentration, pricing, credit offerings, and localised market effects.
The Tribunal granted Lewis limited and carefully controlled participatory rights, finding that its industry knowledge and data could assist in evaluating the merger under section 12A of the Competition Act. On appeal, however, the Competition Appeal Court (CAC) set aside that decision, holding that Lewis had failed to demonstrate that it possessed unique or otherwise unobtainable information.
Lewis then approached the Constitutional Court.
The Legal Issues Before the Court
The Constitutional Court was required to determine:
- Whether the CAC applied the correct legal test for intervention in merger proceedings;
- Whether the CAC impermissibly interfered with the Competition Tribunal’s discretion; and
- Whether the exclusion of Lewis from the merger proceedings implicated the constitutional right of access to courts.
The Constitutional Court’s Key Findings
1. The Test for Intervention Was Misstated by the CAC
The Court held that the CAC introduced, or applied, an incorrect and impermissibly elevated test for intervention by requiring proof that a prospective intervener possessed unique or otherwise unobtainable information.
That standard, the Court confirmed, has no basis in the Competition Act, the Tribunal Rules, or established jurisprudence.
The correct test is whether, on credible and admissible material, the applicant has shown a reasonable prospect of assisting the Tribunal in the performance of its statutory merger analysis.
Uniqueness or exclusivity of information is not required.
2. The Tribunal Exercises a True Discretion
The Court reaffirmed that section 53(c)(v) of the Competition Act confers a true discretion on the Competition Tribunal to recognise participants in merger proceedings.
Appellate courts may interfere only where that discretion was not exercised judicially, was based on a misdirection of law or fact, or resulted in a decision that could not reasonably have been made. None of those thresholds were met in this case.
By substituting its own assessment for that of the Tribunal, the CAC overstepped its role and failed to accord appropriate deference to a specialist adjudicative body.
3. Excluding an Intervener Can Raise Constitutional Concerns
The Court further held that applying an incorrect legal standard for intervention may infringe section 34 of the Constitution (the right of access to courts), particularly where exclusion prevents a party from being heard in the only forum empowered to assess merger-specific competitive harm.
Merger proceedings are fast-moving and exclusion, once effected, is often irreversible.
4. The Tribunal’s Order Was Balanced and Lawful
The Constitutional Court rejected arguments that the Tribunal had “outsourced” the Commission’s functions or granted overly broad rights.
Importantly:
- Lewis was granted targeted, market-specific participation rights only;
- Public-interest issues and certain buyer-power concerns were expressly excluded;
- Confidentiality protections and case-management controls were imposed; and
- The Tribunal retained the power to curtail or withdraw participation if necessary.
This, the Court held, was a careful, rational and proportionate exercise of discretion.
Why This Judgment Matters
This decision is a landmark clarification in South African competition law. It:
- Reaffirms a practical and workable test for third-party intervention in mergers;
- Confirms the central role of the Competition Tribunal as the primary fact-finder in merger control;
- Protects meaningful participation by competitors, trade unions, SMEs and other stakeholders;
- Prevents the erection of artificial barriers to intervention; and
- Strengthens procedural fairness in large merger proceedings.
For practitioners, the judgment underscores that intervention applications should focus on demonstrated assistance, not claims of exclusivity or uniqueness of information.
Conclusion
The Constitutional Court’s ruling restores doctrinal clarity and ensures that merger adjudication remains both robust and fair. By setting aside the CAC’s decision and reinstating the Tribunal’s order, the Court has reinforced a balanced, purposive approach to competition regulation, one that recognises the value of informed participation without sacrificing procedural efficiency.
