Channel Life Ltd and mCubed Investment Life Ltd (16/ LM/Mar05) [2005] ZACT 40 (14 June 2005)

Channel Life Ltd and mCubed Investment Life Ltd (16/ LM/Mar05) [2005] ZACT 40 (14 June 2005)

The Tribunal found that, regardless of the precise definition of the relevant product market, both Channel Life Ltd and mCubed Investment Life Ltd have very low market shares, each less than 2%. They face competition from major life insurance companies such as Old Mutual, Investec, Sanlam, Momentum, and Liberty Group. The Tribunal was not convinced that the market was correctly defined by the Competition Commission but concluded that, under any reasonable market definition, the merger would not substantially prevent or lessen competition. Furthermore, no public interest issues were identified. Accordingly, the merger was approved.

Citation
[2005] ZACT 40
Parties
Applicant: Channel Life Ltd; Respondent: mCubed Investment Life Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
14 June 2005
Case Number
16/LM/Mar05
Procedural Posture
Large Merger / Approval
Outcome
Merger approved without conditions.
Judges
N Manoim, Y Carrim, M Mokuena
Legal Topics
Merger Control, Market Definition, Public Interest, Market Share Analysis
Competition Law Commercial and Corporate Merger Control Market Definition Public Interest Market Share Analysis

Case Brief

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Parties

Channel Life Ltd

Applicant

mCubed Investment Life Ltd

Respondent

Procedural Posture

Large Merger / Approval

Legal Issues

  1. 1 Whether the merger between Channel Life Ltd and mCubed Investment Life Ltd would substantially prevent or lessen competition in the relevant market.
  2. 2 Whether the relevant product market is correctly defined for the purposes of competition analysis.
  3. 3 Whether any public interest issues arise from the transaction.

Ratio Decidendi

The Tribunal found that, regardless of the precise definition of the relevant product market, both Channel Life Ltd and mCubed Investment Life Ltd have very low market shares, each less than 2%. They face competition from major life insurance companies such as Old Mutual, Investec, Sanlam, Momentum, and Liberty Group. The Tribunal was not convinced that the market was correctly defined by the Competition Commission but concluded that, under any reasonable market definition, the merger would not substantially prevent or lessen competition. Furthermore, no public interest issues were identified. Accordingly, the merger was approved.

Court Disposition

Merger approved without conditions.

Orders

  • The merger between Channel Life Ltd and mCubed Investment Life Ltd is approved.
  • No conditions are imposed on the approval.