Bonitas Medical Fund v Liberty Medical Scheme (LM039JUN16) [2016] ZACT 79 (15 September 2016)

Bonitas Medical Fund v Liberty Medical Scheme (LM039JUN16) [2016] ZACT 79 (15 September 2016)

The Tribunal found that the proposed amalgamation of Bonitas Medical Fund and Liberty Medical Scheme would result in a minor increase in market share within the open medical schemes market, from 13% and 2.5% respectively to a combined 15.5%. In the broader market including open and closed schemes, the combined share would be 9%. Major competitors such as Discovery and GEMS would continue to exert significant competitive constraints. The Commission found no vertical foreclosure effects and no adverse impact on competition. Public interest concerns, specifically employment, were addressed by the transfer of all employees under section 197 of the Labour Relations Act, with no retrenchments...

Citation
[2016] ZACT 79
Parties
Applicant: Bonitas Medical Fund; Respondent: Liberty Medical Scheme
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
15 September 2016
Case Number
LM039Jun16
Procedural Posture
Merger Approval / Final Determination
Outcome
The proposed merger is approved unconditionally.
Judges
Medi Mokuena, Anton Roskam, Andiswa Ndoni
Legal Topics
Merger Control, Market Share Analysis, Public Interest, Employment Transfer
Competition Law Commercial and Corporate Merger Control Market Share Analysis Public Interest Employment Transfer

Case Brief

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Parties

Bonitas Medical Fund

Applicant

Liberty Medical Scheme

Respondent

Procedural Posture

Merger Approval / Final Determination

Legal Issues

  1. 1 Whether the proposed amalgamation of Bonitas Medical Fund and Liberty Medical Scheme is likely to 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 amalgamation of Bonitas Medical Fund and Liberty Medical Scheme would result in a minor increase in market share within the open medical schemes market, from 13% and 2.5% respectively to a combined 15.5%. In the broader market including open and closed schemes, the combined share would be 9%. Major competitors such as Discovery and GEMS would continue to exert significant competitive constraints. The Commission found no vertical foreclosure effects and no adverse impact on competition. Public interest concerns, specifically employment, were addressed by the transfer of all employees under section 197 of the Labour Relations Act, with no retrenchments...

Court Disposition

The proposed merger is approved unconditionally.

Orders

  • The proposed transaction between Bonitas Medical Fund and Liberty Medical Scheme is approved without conditions.
  • All employees of Liberty Medical Scheme are to be transferred to Bonitas Medical Fund in terms of section 197 of the Labour Relations Act.