Alternative Channel Limited v m Cubed Life Limited (10/LM/Jan08) [2008] ZACT 25 (22 April 2008)

Alternative Channel Limited v m Cubed Life Limited (10/LM/Jan08) [2008] ZACT 25 (22 April 2008)

The Tribunal found that the combined post-merger market share of the parties in the market for linked life policies is low (6.7% based on premiums and 15.3% based on net benefits paid), and the merged entity will continue to face competition from several significant market players. There is no overlap in the IHPP business, and vertical relationships do not raise foreclosure concerns due to the low market share. No public interest issues were identified. The merger is therefore unlikely to substantially prevent or lessen competition or negatively impact the public interest. The transaction was approved unconditionally.

Citation
[2008] ZACT 25
Parties
Applicant: Alternative Channel Limited; Respondent: m Cubed Life Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
22 April 2008
Case Number
10/LM/Jan08
Procedural Posture
Merger Application / Reasons for Decision
Outcome
Merger approved unconditionally.
Judges
D Lewis, N Manoim, T Orleyn
Legal Topics
Merger Control, Linked Life Policies, Market Share Analysis, Vertical Relationships
Competition Law Commercial and Corporate Merger Control Linked Life Policies Market Share Analysis Vertical Relationships

Case Brief

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Parties

Alternative Channel Limited

Applicant

m Cubed Life Limited

Respondent

Procedural Posture

Merger Application / Reasons for Decision

Legal Issues

  1. 1 Whether the proposed merger between Alternative Channel Limited and m Cubed Life Limited is likely to substantially prevent or lessen competition in the market for linked life policies.
  2. 2 Whether any public interest issues arise from the transaction.
  3. 3 Whether the vertical relationship between the merging parties raises foreclosure concerns.

Ratio Decidendi

The Tribunal found that the combined post-merger market share of the parties in the market for linked life policies is low (6.7% based on premiums and 15.3% based on net benefits paid), and the merged entity will continue to face competition from several significant market players. There is no overlap in the IHPP business, and vertical relationships do not raise foreclosure concerns due to the low market share. No public interest issues were identified. The merger is therefore unlikely to substantially prevent or lessen competition or negatively impact the public interest. The transaction was approved unconditionally.

Court Disposition

Merger approved unconditionally.

Orders

  • The merger between Alternative Channel Limited and m Cubed Life Limited is approved without conditions.