Firstrand Bank Limited and Lending Division of the Transnet Housing Business Unit (73/LM/JUL07) [2007] ZACT 56; [2007] 2 CPLR 308 (CT) (18 September 2007)

Firstrand Bank Limited and Lending Division of the Transnet Housing Business Unit (73/LM/JUL07) [2007] ZACT 56; [2007] 2 CPLR 308 (CT) (18 September 2007)

The Tribunal found that the transaction has both horizontal and vertical implications. However, the Lending Division of Transnet Housing only provides home loans to current and former Transnet employees and does not actively compete with Firstrand Bank in the broader home loans market. The increase in market share resulting from the merger is negligible (0.2%), and significant competitors remain in the market. The Tribunal accepted the Commission's market definition and concluded that the merger will not substantially prevent or lessen competition. No significant public interest issues were identified. The merger was approved without conditions.

Citation
[2007] ZACT 56
Parties
Applicant: Firstrand Bank Limited; Respondent: Lending Division of the Transnet Housing Business Unit
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
18 September 2007
Case Number
73/LM/JUL07
Procedural Posture
Merger Control / Merger Approval
Outcome
Merger approved without conditions.
Judges
Y Carrim, U Bhoola, M Madlanga
Legal Topics
Merger Control, Horizontal Merger, Vertical Merger, Market Definition, Public Interest, Market Share Analysis
Competition Law Banking and Finance Merger Control Horizontal Merger Vertical Merger Market Definition Public Interest Market Share Analysis

Case Brief

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Parties

Firstrand Bank Limited

Applicant

Lending Division of the Transnet Housing Business Unit

Respondent

Procedural Posture

Merger Control / Merger Approval

Legal Issues

  1. 1 Whether the proposed merger will substantially prevent or lessen competition in the home loans market.
  2. 2 Whether the transaction raises any significant public interest concerns.

Ratio Decidendi

The Tribunal found that the transaction has both horizontal and vertical implications. However, the Lending Division of Transnet Housing only provides home loans to current and former Transnet employees and does not actively compete with Firstrand Bank in the broader home loans market. The increase in market share resulting from the merger is negligible (0.2%), and significant competitors remain in the market. The Tribunal accepted the Commission's market definition and concluded that the merger will not substantially prevent or lessen competition. No significant public interest issues were identified. The merger was approved without conditions.

Court Disposition

Merger approved without conditions.

Orders

  • The acquisition by Firstrand Bank Limited of the Lending Division of the Transnet Housing Business Unit is approved without conditions.