Government Employee Pension Fund v SAHL Investment Holdings (Pty) Ltd (LM040Jun24) [2024] ZACT 14 (9 July 2024)
- Citation
- [2024] ZACT 14
- Status
- Judgment
- Jurisdiction
- South Africa
- Court
- Competition Tribunal
- Panel
- A Wessels, I Valodia, G Budlender
- Case number
- LM040Jun24
More details
- Court
- Competition Tribunal
- Panel
- A Wessels, I Valodia, G Budlender
- Case number
- LM040Jun24
On this page
Professional case brief
Research organized from the available case record
01
Holding and result
The Tribunal found that the proposed transaction does not result in a horizontal or vertical overlap between the activities of the merging parties, as the acquiring firm does not control any firm involved in the provision of home loan and related services. There are no information exchange concerns, and the transaction is unlikely to substantially prevent or lessen competition in any relevant market. The transaction will not negatively affect employment, and no further intervention is required regarding the spread of ownership due to the nature of the GEPF. No other public interest concerns were identified. Accordingly, the merger was approved unconditionally.
Court disposition
Merger approved unconditionally.
Orders
- The proposed transaction is approved without conditions.
02
Material facts
Parties
Government Employee Pension Fund
Applicant Counsel: Lebohang Mabidikane and Mmakgabo MakgaboSAHL Investment Holdings (Pty) Ltd
RespondentAmounts and remedies
- Percentage of Shares Acquired: 25
- Post Merger Shareholding Percentage: 50
03
Procedural history
Posture
Large Merger / Merger Approval
04
Questions and positions
Legal issues
- 01
Whether the proposed acquisition of additional shares by GEPF in SAHL Investment Holdings raises competition concerns.
- 02
Whether the transaction has any negative effect on employment.
- 03
Whether the transaction requires intervention regarding the spread of ownership.
- 04
Whether any other public interest concerns arise from the transaction.
Party arguments
- Applicant
- The applicant argued that the acquisition of an additional 25% shareholding in SAHL Investment Holdings would not result in any negative competition effects, nor would it impact employment or require intervention regarding ownership spread, given the nature of the GEPF as a statutory pension fund.
- Respondent
- The respondent confirmed that the transaction would not have any negative effect on employment and did not raise any other public interest concerns. The respondent did not oppose the merger and concurred with the Commission's findings.
05
Court’s reasoning
Legal principles
- 01
Competition Act 89 of 1998
A merger may only be prohibited if it is likely to substantially prevent or lessen competition in any relevant market.
- 02
Competition Act 89 of 1998
Public interest considerations must be assessed, including the effect on employment and the promotion of a greater spread of ownership.
06
Ratio, limits and disposition
Ratio decidendi
The Tribunal found that the proposed transaction does not result in a horizontal or vertical overlap between the activities of the merging parties, as the acquiring firm does not control any firm involved in the provision of home loan and related services. There are no information exchange concerns, and the transaction is unlikely to substantially prevent or lessen competition in any relevant market. The transaction will not negatively affect employment, and no further intervention is required regarding the spread of ownership due to the nature of the GEPF. No other public interest concerns were identified. Accordingly, the merger was approved unconditionally.
Obiter and limits
- The Tribunal noted that the GEPF, as a statutory pension fund, is not the type of acquiring firm that would typically raise ownership spread concerns in merger reviews.
- The absence of any negative effect on employment was confirmed by both parties, supporting the unconditional approval of the merger.
Court disposition
Merger approved unconditionally.
- The proposed transaction is approved without conditions.
Source and reliance status
Competition Tribunal
This page organises the available record for research. Confirm quotations, current status, and subsequent treatment against the official source before relying on the case.
Judgment reading view
Judgment text
The complete available source text.
Competition Tribunal
Judgment
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case no: LM040Jun24
The Government Employee Pension Fund, Primary Acquiring Firm duly represented by the Public Investment Corporation SOC Ltd And
SAHL Investment Holdings (Pty) Ltd Primary Target Firm
Panel : A Wessels (Presiding Member) : I Valodia (Tribunal Member) : G Budlender (Tribunal Member) Heard on : 02 July 2024 Order issued on : 02 July 2024 Reasons issued on : 09 July 2024
REASONS
FOR DECISION
Introduction
[1] On 02 July 2024, the Competition Tribunal (“Tribunal”) unconditionally approved a large merger in terms of which the Government Employee Pension Fund (“GEPF”) represented by the Public Investment Corporation SOC Limited (“PIC”)
intends to acquire an additional 25% shares in SAHL Investment Holdings Proprietary Limited (“SAHLIH”).
[2] On completion of the proposed transaction, the GEPF’s shareholding in SAHLIH will increase from 25% to 50% and it will exercise joint control of SAHLIH.
Parties and their activities
Primary acquiring firm
[3] The primary acquiring firm is the GEPF, a juristic person established pursuant to section 2 of the Government Employees Pension Law Act 21 of 1996. It is statutorily mandated to manage and administer pensions and other benefits for government employees in South Africa. It holds interests in various firms because of its wide investment mandate.
[4] The PIC, on behalf of the GEPF, invests in various classes of assets including equities, property, and fixed income, which the PIC has been appointed to manage.
Primary target firm
[5] The primary target firm is SAHLIH, a company incorporated in accordance with the laws of the Republic of South Africa. It is active in the provision of home loans and related activities.
Competition assessment
[6] The Competition Commission (“Commission”) found that the proposed transaction does not result in a horizontal overlap between the activities of the merging parties since the acquiring firm does not control any firm that is involved in the provision of home loan and related services.
[7] Further, the Commission found that the proposed transaction does not give rise to any vertical overlap and that there are no information exchange concerns likely to arise as a result of the proposed transaction.
[8] We have no reason to disagree with the Commission’s findings and conclude that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market.
Public Interest
Effect on employment
[9] The merging parties confirmed that the proposed transaction will not have any negative effect on employment.
Effect on ownership
[10] The Commission concluded that the proposed transaction does not require any further intervention as regards the promotion of a greater spread of ownership given the nature of the GEPF as the acquiring firm that is increasing its shareholding in SAHLIH.
Other public interest considerations
[11] The proposed transaction raises no other public interest concerns.
Conclusion
[12] For the reasons set out above, we approve the proposed transaction without conditions.
09 July 2024
Date
Mr. A Wessels
Adv G. Budlender SC and Prof I Valodia concurring
Tribunal Case Manager: Nomkhosi Mthethwa-Motsa For the Merging Parties: Lebohang Mabidikane and Mmakgabo Makgabo of Cliffe Dekker Hofmeyr Inc For the Commission: Raksha Darji and Tsehla Mathe
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