Absa Bank Limited v Custody, trustee and derivatives clearing business of Societe Generale S.A Johannesburg branch and global custody services performed via foreign sub-custodians (LM021May19) [2019] ZACT 32 (28 June 2019)

Absa Bank Limited v Custody, trustee and derivatives clearing business of Societe Generale S.A Johannesburg branch and global custody services performed via foreign sub-custodians (LM021May19) [2019] ZACT 32 (28 June 2019)

The Tribunal found that the proposed transaction would not result in significant market share accretions in the relevant markets for equity, currency, and interest rate derivatives clearing services, nor in the broader market for derivatives clearing services. The merged entity's market shares would remain below thresholds that typically raise competition concerns, and the entity would continue to face competitive constraints from other market participants. Furthermore, the transaction would not negatively affect employment or raise other public interest concerns. Accordingly, the Tribunal concluded that the merger was unlikely to substantially prevent or lessen competition or negatively...

Citation
[2019] ZACT 32
Parties
Applicant: Absa Bank Limited; Respondent: Custody, trustee and derivatives clearing business of Societe Generale S.A Johannesburg branch and global custody services performed via foreign sub-custodians
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
28 June 2019
Case Number
LM021May19
Procedural Posture
Merger Approval / Final Determination
Outcome
The proposed transaction is approved unconditionally.
Judges
Norman Manoim, Mondo Mazwai, Medi Mokuena
Legal Topics
Merger Control, Horizontal Overlap, Market Share Analysis, Public Interest, Unconditional Approval
Competition Law Commercial and Corporate Merger Control Horizontal Overlap Market Share Analysis Public Interest Unconditional Approval

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Parties

Absa Bank Limited

Applicant

Custody, trustee and derivatives clearing business of Societe Generale S.A Johannesburg branch and global custody services performed via foreign sub-custodians

Respondent

Procedural Posture

Merger Approval / Final Determination

Legal Issues

  1. 1 Whether the proposed merger will substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the transaction raises any public interest concerns, including effects on employment.

Ratio Decidendi

The Tribunal found that the proposed transaction would not result in significant market share accretions in the relevant markets for equity, currency, and interest rate derivatives clearing services, nor in the broader market for derivatives clearing services. The merged entity's market shares would remain below thresholds that typically raise competition concerns, and the entity would continue to face competitive constraints from other market participants. Furthermore, the transaction would not negatively affect employment or raise other public interest concerns. Accordingly, the Tribunal concluded that the merger was unlikely to substantially prevent or lessen competition or negatively...

Court Disposition

The proposed transaction is approved unconditionally.

Orders

  • The merger between Absa Bank Limited and the custody, trustee and derivatives clearing business of Societe Generale S.A Johannesburg branch and global custody services performed via foreign sub-custodians is approved unconditionally.