ABSA Group Limited and PSG Investment Bank Holdings (82/LM/Nov02) [2002] ZACT 72 (20 December 2002)

ABSA Group Limited and PSG Investment Bank Holdings (82/LM/Nov02) [2002] ZACT 72 (20 December 2002)

The Tribunal found that the relevant markets affected by the merger were treasury services, specialised finance (including structured finance, project finance, and structured products), and proprietary investment businesses, all within the wholesale banking sector. In each market, the combined post-merger market share would not exceed 20%, and the increment to ABSA's market share was insignificant, being less than 1%. The customers in these markets are sophisticated corporate entities with access to alternative providers, both local and foreign, reducing the risk of market power abuse. The Tribunal also determined that any retrenchments were attributable to broader industry turbulence...

Citation
[2002] ZACT 72
Parties
Applicant: ABSA Group Limited; Respondent: PSG Investment Bank Holdings Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
20 December 2002
Case Number
82/LM/Nov02
Procedural Posture
Large Merger Review / Merger Clearance Decision
Outcome
Merger approved unconditionally.
Judges
N. Manoim, D. Lewis, M. Holden
Legal Topics
Large Merger Review, Market Definition, Public Interest, Market Share Analysis
Competition Law Commercial and Corporate Large Merger Review Market Definition Public Interest Market Share Analysis

Case Brief

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Parties

ABSA Group Limited

Applicant

PSG Investment Bank Holdings Limited

Respondent

Procedural Posture

Large Merger Review / Merger Clearance Decision

Legal Issues

  1. 1 Does the proposed merger between ABSA Group Limited and PSG Investment Bank Holdings Limited substantially lessen competition in any relevant market?
  2. 2 Are there any public interest concerns arising from the merger that would warrant its prohibition or conditional approval?

Ratio Decidendi

The Tribunal found that the relevant markets affected by the merger were treasury services, specialised finance (including structured finance, project finance, and structured products), and proprietary investment businesses, all within the wholesale banking sector. In each market, the combined post-merger market share would not exceed 20%, and the increment to ABSA's market share was insignificant, being less than 1%. The customers in these markets are sophisticated corporate entities with access to alternative providers, both local and foreign, reducing the risk of market power abuse. The Tribunal also determined that any retrenchments were attributable to broader industry turbulence...

Court Disposition

Merger approved unconditionally.

Orders

  • The merger between ABSA Group Limited and PSG Investment Bank Holdings Limited is approved without conditions.