Investec Group Ltd and Fedsure Investments Ltd / Fedsure International Ltd (19/LM/Mar01) [2001] ZACT 22 (14 June 2001)

Investec Group Ltd and Fedsure Investments Ltd / Fedsure International Ltd (19/LM/Mar01) [2001] ZACT 22 (14 June 2001)

The Tribunal found that the relevant markets were appropriately defined using product classes previously accepted in similar merger reviews. In all overlapping markets, the combined market shares of the merging parties were low, never exceeding 14%, and the overlaps were either insignificant or due to cross-holdings that do not result in direct competition for the same customer base. The vertical relationship between Investec's broking business and Fedsure's insurance product business was not considered problematic, as neither firm is dominant in its respective market. The asset management market, including unit trusts, was found to be highly competitive, with the merged entity holding a...

Citation
[2001] ZACT 22
Parties
Applicant: Investec Group Ltd; Respondent: Fedsure Investments Ltd; Respondent: Fedsure International Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
14 June 2001
Case Number
19/LM/Mar01
Procedural Posture
Large Merger Review / Merger Clearance Decision
Outcome
Merger approved without conditions.
Judges
N.M. Manoim, M.T.K. Moerane, S. Zilwa
Legal Topics
Large Merger Review, Market Definition, Vertical Relationships, Public Interest, Employment Effects
Competition Law Commercial and Corporate Large Merger Review Market Definition Vertical Relationships Public Interest Employment Effects

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Parties

Investec Group Ltd

Applicant

Fedsure Investments Ltd

Respondent

Fedsure International Ltd

Respondent

Procedural Posture

Large Merger Review / Merger Clearance Decision

Legal Issues

  1. 1 Does the proposed merger between Investec Group Ltd and Fedsure Investments Ltd and Fedsure International Ltd substantially lessen competition in any relevant market?
  2. 2 Are there any significant public interest concerns arising from the merger, particularly regarding employment?
  3. 3 Is the vertical relationship between Investec's broking business and Fedsure's insurance product business likely to raise competition concerns?

Ratio Decidendi

The Tribunal found that the relevant markets were appropriately defined using product classes previously accepted in similar merger reviews. In all overlapping markets, the combined market shares of the merging parties were low, never exceeding 14%, and the overlaps were either insignificant or due to cross-holdings that do not result in direct competition for the same customer base. The vertical relationship between Investec's broking business and Fedsure's insurance product business was not considered problematic, as neither firm is dominant in its respective market. The asset management market, including unit trusts, was found to be highly competitive, with the merged entity holding a...

Court Disposition

Merger approved without conditions.

Orders

  • The merger between Investec Group Ltd and Fedsure Investments Ltd and Fedsure International Ltd is approved without conditions.
  • A Merger Clearance Certificate is issued.