IEP Portfolio 1 (Pty) Ltd v Assupol Holdings Limited (LM042May18) [2018] ZACT 76 (22 August 2018)

IEP Portfolio 1 (Pty) Ltd v Assupol Holdings Limited (LM042May18) [2018] ZACT 76 (22 August 2018)

The Tribunal found that although the transaction would result in IEP Portfolio 1 (Pty) Ltd obtaining de facto control over Assupol Holdings Limited, the combined market shares of Investec Life and Assupol in the relevant long-term insurance markets are below 5%. The Tribunal identified risks of anti-competitive information exchange and cross directorships due to existing structural links between the parties. To address these concerns, the Tribunal imposed specific conditions prohibiting the sharing of competitively sensitive information between directors or managers of competing entities and restricting cross directorships. Compliance and monitoring mechanisms were also established. The...

Citation
[2018] ZACT 76
Parties
Applicant: IEP Portfolio 1 (Pty) Ltd; Respondent: Assupol Holdings Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
22 August 2018
Case Number
LM042May18
Procedural Posture
Merger Control / Conditional Approval After Hearing
Outcome
Conditional approval of the merger subject to the imposed remedies and compliance conditions.
Judges
Andreas Wessels, Enver Daniels, Fiona Tregenna
Legal Topics
Merger Control, Information Exchange, Cross Directorships, Competition Act Section 4
Competition Law Commercial and Corporate Merger Control Information Exchange Cross Directorships Competition Act Section 4

Case Brief

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Parties

IEP Portfolio 1 (Pty) Ltd

Applicant

Assupol Holdings Limited

Respondent

Procedural Posture

Merger Control / Conditional Approval After Hearing

Legal Issues

  1. 1 Whether the proposed increase in shareholding by IEP Portfolio 1 (Pty) Ltd in Assupol Holdings Limited will result in de facto control and raise competition concerns.
  2. 2 Whether the transaction creates risks of anti-competitive information exchange and cross directorships between Investec Life and Assupol.
  3. 3 Whether the imposed conditions adequately address competition and public interest concerns.

Ratio Decidendi

The Tribunal found that although the transaction would result in IEP Portfolio 1 (Pty) Ltd obtaining de facto control over Assupol Holdings Limited, the combined market shares of Investec Life and Assupol in the relevant long-term insurance markets are below 5%. The Tribunal identified risks of anti-competitive information exchange and cross directorships due to existing structural links between the parties. To address these concerns, the Tribunal imposed specific conditions prohibiting the sharing of competitively sensitive information between directors or managers of competing entities and restricting cross directorships. Compliance and monitoring mechanisms were also established. The...

Court Disposition

Conditional approval of the merger subject to the imposed remedies and compliance conditions.

Orders

  • The merger is approved subject to the conditions set out in Annexure A.
  • IEP Group must ensure that competitively sensitive information pertaining to Assupol is not made available to any Investec Bank Limited representative who is a director or manager of, or involved in determining strategy at, any competing Investec entity.