A High Court judge in Cape Town has ruled that he has no jurisdiction to grant an interdict preventing the merger between South African liquor giants Distillers Corporation and Stellenbosch Farmers Winery.

Justice Thabani Jali today (24 November 2000) dismissed the action with costs to Seagram Africa, who attempted to scupper the merger, which is now expected to go ahead on Monday 4 December 2000.

In a supporting statement to his judgement, Justice Jali referred to the fact that Seagram MD Peter Fleck had already approached both the Minister of Trade and Industry, as well as the Competition Commission about the merger.

"It is clear that the Commission has already formed a view about the nature of this transaction entered into between the respondents. In its view it is not a merger as contemplated in section 12 (of the Competitions Act of 1998)," he said in a statement.

"In the circumstances, I fail to understand the benefit, which would be derived by the parties referring the matter back to the (Competition) Tribunal, when the Commission has already formed an opinion in this regard. I cannot see a problem with the applicant (Seagram) referring this matter to the Tribunal itself if it is not satisfied with the Commission's position," he concluded.

After judgement was given, Andre Steyn, Corporate Affairs Director for SFW, said they were confident throughout of the outcome.

"This is what we expected, but it is still a relief to have it behind us. We can now move forward. We informed our shareholders by means of an advertisement in the financial press today that there was a delay and that we would keep them up-to-date on what is happening," he said.

"We plan to delist SFW on the Johannesburg Stock Exchange next Friday and list as one company on 4 December," said Steyn.

A Seagram's spokesman could not be reached for comment.

There is however, a further hurdle to be overcome. Bulmer SA, a subsidiary of British cider house HP Bulmer, has also lodged an application with the Competition Tribunal against the merger.

The Tribunal has requested information from Distillers-SFW concerning the merger and are awaiting their reply.

The gist of the complaint by Bulmers against the merger is that back in 1979 the two companies were established to enhance competition, even though they had the same majority shareholders. Rembrandt-KWV Investments still have a joint 60% controlling interest in each company, while South African Breweries has a 30% share in each company. Individual shareholders hold the remaining 10%.

Steyn said Distillers and SFW were also very confident about proceedings going their way at the Competition Tribunal.

"We are sure it will also be sorted out at that level," he said.