Investec Asset Management SA Group Limited v Investec Asset Management Holding (Pty) Ltd (LM1270ct19) [2020] ZACT 1; [2020] 1 CPLR 358 (CT) (9 January 2020)
- Citation
- [2020] ZACT 1
- Status
- Judgment
- Jurisdiction
- South Africa
- Court
- Competition Tribunal
- Panel
- E Daniels, Y Carrim, A Ndoni
- Case number
- LM1270ct19
More details
- Court
- Competition Tribunal
- Panel
- E Daniels, Y Carrim, A Ndoni
- Case number
- LM1270ct19
On this page
Professional case brief
Research organized from the available case record
01
Holding and result
The Tribunal found that the proposed demerger transaction does not result in any horizontal or vertical overlap between the merging parties, as they do not provide substitutable services or inputs to each other. The transaction will not alter the structure of the relevant market and is therefore unlikely to prevent or lessen competition. Furthermore, the merging parties confirmed that there would be no adverse effects on employment, and no other public interest concerns were raised. Accordingly, the Tribunal approved the transaction unconditionally.
Court disposition
The merger was approved unconditionally.
Orders
- The large merger between Investec Asset Management SA Group Limited, Investec Asset Management UK Group PLC, Investec Asset Management Holdings (Pty) Ltd, and Investec Asset Management Limited is approved without conditions.
02
Material facts
Parties
Investec Asset Management SA Group Limited
Applicant Counsel: Mark GardenInvestec Asset Management UK Group PLC
Applicant Counsel: Mark GardenInvestec Asset Management Holdings (Pty) Ltd
Respondent Counsel: Tayla TheronInvestec Asset Management Limited
Respondent Counsel: Tayla Theron03
Procedural history
Posture
Merger Approval / Reasons for Decision
04
Questions and positions
Legal issues
- 01
Whether the proposed demerger transaction would substantially prevent or lessen competition in the relevant market.
- 02
Whether the transaction raises any public interest concerns, including adverse effects on employment.
Party arguments
- Applicant
- The merging parties argued that the transaction is a restructuring and demerger of asset management services from the Investec Group to newly established entities, which will be independently listed on the JSE and LSE. They asserted that there is no horizontal or vertical overlap between the parties, and the transaction will not alter the market structure or negatively impact competition. They further confirmed that there would be no adverse effects on employment and that employees raised no concerns.
- Respondent
- The Competition Commission agreed with the merging parties, finding that the transaction does not result in any horizontal or vertical overlap, as the parties do not provide substitutable services or inputs to each other. The Commission concluded that the transaction would not change the structure of the relevant market and would not prevent or lessen competition. No public interest concerns, including employment effects, were identified.
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 the relevant market.
- 02
Competition Act, 89 of 1998
The Tribunal must consider public interest factors, including the effect of the transaction on employment.
06
Ratio, limits and disposition
Ratio decidendi
The Tribunal found that the proposed demerger transaction does not result in any horizontal or vertical overlap between the merging parties, as they do not provide substitutable services or inputs to each other. The transaction will not alter the structure of the relevant market and is therefore unlikely to prevent or lessen competition. Furthermore, the merging parties confirmed that there would be no adverse effects on employment, and no other public interest concerns were raised. Accordingly, the Tribunal approved the transaction unconditionally.
Obiter and limits
- The merging parties indicated during the hearing that the acquiring firms will now be referred to as Ninety One Ltd (SA) and Ninety One PLC (UK).
- No concerns were raised by employees regarding the transaction.
Court disposition
The merger was approved unconditionally.
- The large merger between Investec Asset Management SA Group Limited, Investec Asset Management UK Group PLC, Investec Asset Management Holdings (Pty) Ltd, and Investec Asset Management Limited 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
competitiontribunal
SOUTH
AFRICA
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case No: LM1270ct19
In the matter between:
Investec Asset Management SA Group Limited and Primary Acquiring Firm
Investec Management Asset Management UK Group PLC
And
Investec Asset Management Holding (Pty) Ltd and Primary Target Firm
Investec Asset Management Limited
Panel: E Daniels (Presiding Member)
: Y Carrim (Tribunal Member)
: A Ndoni (Tribunal Member)
Heard on: 27 November 2019
Order issued on: 27 November 2019
Reasons issued on: 09 January 2020
REASONS FOR DECISION
Approval
[1] On 27 November 2019, the Competition Tribunal ("Tribunal") approved the large merger between Investec Asset Management SA Group Limited and Investec Asset Management UK Group Pie and Investec Asset Management Holdings (Pty) Ltd and Investec Asset Management Limited.
[2] The reasons for the unconditional approval follow.
PARTIES TO THE
TRANSACTION
Primary Acquiring Firm
[3] The primary acquiring firms are Investec Asset Management SA Group Limited ("IAM SA ListCo") and Invest Asset Management UK Group Pie ("IAM UK ListCo"). These companies are incorporated in accordance with the company laws of the Republic of South Africa ("South Africa") and the United Kingdom ("UK"), respectively.[1]
[4] 1AM SA ListCo and 1AM UK ListCo operate as one corporate group through a dual listed company (DLC) arrangement. Collectively, they are referred to as 1AM DLC.IAM DLC does not have prior operations or business activities.
Primary Target Firm
[5] The primary target firms are Investec Asset Management Holdings (Pty) Ltd ("IAM SA") and Investec Asset Management Limited ("IAM UK"). These companies are incorporated in accordance with the company laws of South Africa and UK, respectively.
[6] 1AM is active in the provision of active investment products and services to institutional and advisor clients. 1AM investment
offering includes equities, fixed income, multi asset management and alternatives strategies.
PROPOSED TRANSACTION
[7] The proposed transaction is the demerger of 1AM from the Investec Group. The transaction comprises a restructuring of the asset
management service from the Investec Group to newly established entities that will be independently li5ted on the JSE and LSE.
COMPETITION ANALYSIS
[8] The Commission considered the activities of the merging parties and found that proposed transaction does not result in a horizontal or vertical overlap as the merging parties do not provide services that are substitutable or considered to be inputs to each other. The proposed transaction will not change the structure of the relevant market and as such, the Tribunal is of the view that the proposed transaction is unlikely to prevent or lessen competition.
PUBLIC
INTEREST
[9] The merging parties confirmed that the proposed transaction would not have any adverse effects on employment in South Africa. The employees of 1AM raised no concerns with the transaction. The transaction raises no other public interest concerns.
CONCLUSION
[10] In light of the above, we approved the transaction subject to no conditions.
09 January 2020
Date
Mr Enver Daniels
Ms Yasmin Carrim and Ms Andiswa Ndoni
Tribunal Case Manager : Lumkisa Jordaan
For the merging parties : Mark Garden and Tayla Theron of ENSafrica
For the Commission : Nonhlanhla Msiza and Mogau Aphane
[1] During the course of the hearing, the merging parties indicated that the acquiring firms will now be referred to as Ninety One Ltd (SA) and Ninety One Pie (UK).
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