African Bank Investments Limited and Ellerine Holdings Limited (105/LM/Sept07) [2008] ZACT 12; [2008] 1 CPLR 89 (CT) (8 February 2008)

African Bank Investments Limited and Ellerine Holdings Limited (105/LM/Sept07) [2008] ZACT 12; [2008] 1 CPLR 89 (CT) (8 February 2008)

The Tribunal found that the relevant market is the market for the provision of unsecured credit, as statutory barriers have been removed by the National Credit Act. The combined post-merger market share of the parties is 10%, which is relatively low compared to other competitors. The Tribunal determined that the transaction does not give rise to substantial horizontal or vertical competition concerns. Foreclosure of competitors is not feasible due to the nature of unsecured credit and the inability to restrict customer choice. There are no public interest issues arising from the merger. Accordingly, the merger is approved unconditionally.

Citation
[2008] ZACT 12
Parties
Applicant: African Bank Investments Limited; Respondent: Ellerine Holdings Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
8 February 2008
Case Number
105/LM/Sept07
Procedural Posture
Merger Application / Reasons for Decision
Outcome
Merger approved unconditionally.
Judges
D Lewis, Y Carrim, M Mokuena
Legal Topics
Merger Control, Vertical Effects, Market Definition, Foreclosure, Public Interest
Competition Law Commercial and Corporate Merger Control Vertical Effects Market Definition Foreclosure Public Interest

Case Brief

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Parties

African Bank Investments Limited

Applicant

Ellerine Holdings Limited

Respondent

Procedural Posture

Merger Application / Reasons for Decision

Legal Issues

  1. 1 Whether the merger between African Bank Investments Limited and Ellerine Holdings Limited is likely to substantially prevent or lessen competition in the market for unsecured credit.
  2. 2 Whether the transaction gives rise to any vertical foreclosure concerns affecting competitors.
  3. 3 Whether there are any public interest issues arising from the merger.

Ratio Decidendi

The Tribunal found that the relevant market is the market for the provision of unsecured credit, as statutory barriers have been removed by the National Credit Act. The combined post-merger market share of the parties is 10%, which is relatively low compared to other competitors. The Tribunal determined that the transaction does not give rise to substantial horizontal or vertical competition concerns. Foreclosure of competitors is not feasible due to the nature of unsecured credit and the inability to restrict customer choice. There are no public interest issues arising from the merger. Accordingly, the merger is approved unconditionally.

Court Disposition

Merger approved unconditionally.

Orders

  • The merger between African Bank Investments Limited and Ellerine Holdings Limited is approved without conditions.