ABSA Group Limited v Woolworths Financial Services (Pty) Ltd (59/LM/MAY08) [2008] ZACT 61 (31 July 2008)

ABSA Group Limited v Woolworths Financial Services (Pty) Ltd (59/LM/MAY08) [2008] ZACT 61 (31 July 2008)

The Tribunal found that the merger would not result in a substantial lessening or prevention of competition in any of the relevant markets. The combined market shares in unsecured personal lending, credit cards, personal loans, and short-term insurance segments were not significant enough to raise competition concerns, with market share accretion post-merger being negligible and other credible competitors present. No foreclosure concerns arose from the vertical relationship, as Woolworths FS would continue to source banking services from Standard Bank and other banks. There were no public interest issues identified. Accordingly, the merger was approved without conditions.

Citation
[2008] ZACT 61
Parties
Applicant: ABSA Group Limited; Respondent: Woolworths Financial Services (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
31 July 2008
Case Number
59/LM/MAY08
Procedural Posture
Merger Control / Merger Approval
Outcome
Merger approved without conditions.
Judges
D Lewis, Y Carrim, L Reyburn
Legal Topics
Merger Control, Horizontal Merger Analysis, Vertical Relationships, Market Share Assessment
Competition Law Commercial and Corporate Merger Control Horizontal Merger Analysis Vertical Relationships Market Share Assessment

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Parties

ABSA Group Limited

Applicant

Woolworths Financial Services (Pty) Ltd

Respondent

Procedural Posture

Merger Control / Merger Approval

Legal Issues

  1. 1 Whether the proposed merger between ABSA Group Limited and Woolworths Financial Services (Pty) Ltd will substantially lessen or prevent competition in the relevant markets.
  2. 2 Whether any foreclosure concerns arise from the vertical relationship between the merging parties.
  3. 3 Whether there are any public interest issues associated with the merger.

Ratio Decidendi

The Tribunal found that the merger would not result in a substantial lessening or prevention of competition in any of the relevant markets. The combined market shares in unsecured personal lending, credit cards, personal loans, and short-term insurance segments were not significant enough to raise competition concerns, with market share accretion post-merger being negligible and other credible competitors present. No foreclosure concerns arose from the vertical relationship, as Woolworths FS would continue to source banking services from Standard Bank and other banks. There were no public interest issues identified. Accordingly, the merger was approved without conditions.

Court Disposition

Merger approved without conditions.

Orders

  • The merger between ABSA Group Limited and Woolworths Financial Services (Pty) Ltd is approved without conditions.