K2017235138 (South Africa) (Pty) Ltd v Old Mutual Plc (LM179Sep17) [2018] ZACT 12; [2018] 1 CPLR 283 (CT) (26 January 2018)

K2017235138 (South Africa) (Pty) Ltd v Old Mutual Plc (LM179Sep17) [2018] ZACT 12; [2018] 1 CPLR 283 (CT) (26 January 2018)

The Tribunal found that the proposed transaction constitutes an internal reorganisation and managed separation of the Old Mutual Group, with no horizontal or vertical overlap in the South African market. The Competition Commission's investigation confirmed that the merger is unlikely to substantially prevent or lessen competition. Public interest concerns raised by the Economic Development Department, specifically regarding black economic empowerment, employment, and enterprise development, were addressed through undertakings by the merging parties. The Tribunal accepted that these undertakings, formalised as conditions to the merger, are not remedial but proactive commitments. The...

Citation
[2018] ZACT 12
Parties
Applicant: K2017235138 (South Africa) (Pty) Ltd; Respondent: Old Mutual Plc
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
26 January 2018
Case Number
LM179Sep17
Procedural Posture
Large Merger Application / Approval With Conditions
Outcome
Merger approved subject to public interest conditions.
Judges
Norman Manoim, AW Wessels, Medi Mokuena
Legal Topics
Large Merger Notification, Public Interest Conditions, Black Economic Empowerment, Enterprise Development, Employment Commitments
Competition Law Commercial and Corporate Large Merger Notification Public Interest Conditions Black Economic Empowerment Enterprise Development Employment Commitments

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Parties

K2017235138 (South Africa) (Pty) Ltd

Applicant

Old Mutual Plc

Respondent

Procedural Posture

Large Merger Application / Approval With Conditions

Legal Issues

  1. 1 Does the proposed internal reorganisation and managed separation of the Old Mutual Group substantially prevent or lessen competition in any relevant market within South Africa.
  2. 2 Are there any adverse public interest consequences arising from the merger, particularly regarding black economic empowerment, employment, and enterprise development.
  3. 3 Should the merger be approved subject to public interest conditions agreed between the merging parties and the Economic Development Department.

Ratio Decidendi

The Tribunal found that the proposed transaction constitutes an internal reorganisation and managed separation of the Old Mutual Group, with no horizontal or vertical overlap in the South African market. The Competition Commission's investigation confirmed that the merger is unlikely to substantially prevent or lessen competition. Public interest concerns raised by the Economic Development Department, specifically regarding black economic empowerment, employment, and enterprise development, were addressed through undertakings by the merging parties. The Tribunal accepted that these undertakings, formalised as conditions to the merger, are not remedial but proactive commitments. The...

Court Disposition

Merger approved subject to public interest conditions.

Orders

  • The proposed transaction is approved subject to the public interest conditions annexed to the decision, including commitments on black economic empowerment, employment, and enterprise development.
  • Old Mutual Limited shall increase its BEE shareholding to at least 25% within three years of the implementation date.