Smoothing Ruffled Feathers

FTI Consulting’s role in the recently approved ostrich merger

Economic Consulting

August 28, 2019


On 14 August 2019, the Competition Tribunal conditionally approved the intermediate merger between Klein Karoo International (KKI) and Mosstrich, the two largest ostrich processing firms in South Africa. This follows the initial prohibition by the Competition Commission (CC) on 19 December 2018.

FTI Consulting (instructed by Adams & Adams Attorneys), acted as economic experts for the merging parties and provided economic analyses throughout the entire merger process. The economic work done by FTI Consulting encompassed site visits, data gathering, complex data analyses, writing expert economic reports, attending expert witness meetings at the CC and providing expert witness testimony before the Competition Tribunal as part of a concurrent evidence (“hot tub”) process. FTI Consulting also assisted in developing the final conditions that led to the approval of the merger.

Prof Nicola Theron (Senior Managing Director and Head of Economic and Financial Consulting at FTI Consulting South Africa) acted as the expert witness for the merging parties and debated various important themes with the CC’s expert witness and was cross-examined by the CC’s legal counsel. The themes discussed during the hot tub covered complex economic topics such as market definition, competitive effects analyses, the counterfactual, public interest and efficiencies.

The declining South African ostrich industry – rationale for the merger

South Africa is the largest provider of ostrich products in the world. The products can primarily be categorised as meat, feathers and leather and have a variety of uses. They are especially sought after in the international market – mainly Europe. As such, the ostrich industry has become export-oriented, earning large amounts of foreign exchange and creating local jobs on a large scale in areas such as Oudtshoorn and Mossel Bay. However, the persistence of export bans due to Avian Influenza (AI) has resulted in the slow demise of the ostrich industry.

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Key Contact

Nicola Theron

Senior Managing Director, Head of South Africa Economic and Financial Consulting