Liberty Group Limited and Investec Employee Benefits Limited (32/LM/Jun03) [2003] ZACT 42 (18 August 2003)

Liberty Group Limited and Investec Employee Benefits Limited (32/LM/Jun03) [2003] ZACT 42 (18 August 2003)

The Tribunal found that the merger would result in the merged entity holding an 18% market share in the national market for group investment, risk underwriting, and administration services to retirement funds. This level of concentration does not raise competition concerns, given the presence of numerous large competitors and the regular entry of new providers. The independence of pension funds and trustees, as well as the strong countervailing power of brokers, ensures that the merged entity cannot exercise market power to the detriment of customers. Barriers to entry are not prohibitive, especially for brokers, and entry has occurred regularly in recent years. No significant public...

Citation
[2003] ZACT 42
Parties
Applicant: Liberty Group Limited; Respondent: Investec Employee Benefits Limited; Respondent: Competition Commission
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
18 August 2003
Case Number
32/LM/Jun03
Procedural Posture
Large Merger / Merger Clearance Approval
Outcome
Merger approved unconditionally; no substantial lessening or prevention of competition found.
Judges
N. Manoim, F. Fourie, P. Maponya
Legal Topics
Large Merger Review, Retirement Fund Market Definition, Barriers to Entry, Countervailing Power, Public Interest Employment
Competition Law Commercial and Corporate Large Merger Review Retirement Fund Market Definition Barriers to Entry Countervailing Power Public Interest Employment

Case Brief

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Parties

Liberty Group Limited

Applicant

Investec Employee Benefits Limited

Respondent

Competition Commission

Respondent

Procedural Posture

Large Merger / Merger Clearance Approval

Legal Issues

  1. 1 Whether the proposed merger between Liberty Group Limited and Investec Employee Benefits Limited is likely to substantially lessen or prevent competition in the relevant market.
  2. 2 Whether the transaction raises any significant public interest concerns, particularly regarding employment.
  3. 3 What is the relevant product and geographic market for assessing the competitive impact of the merger.

Ratio Decidendi

The Tribunal found that the merger would result in the merged entity holding an 18% market share in the national market for group investment, risk underwriting, and administration services to retirement funds. This level of concentration does not raise competition concerns, given the presence of numerous large competitors and the regular entry of new providers. The independence of pension funds and trustees, as well as the strong countervailing power of brokers, ensures that the merged entity cannot exercise market power to the detriment of customers. Barriers to entry are not prohibitive, especially for brokers, and entry has occurred regularly in recent years. No significant public...

Court Disposition

Merger approved unconditionally; no substantial lessening or prevention of competition found.

Orders

  • The merger between Liberty Group Limited and Investec Employee Benefits Limited is approved without conditions.
  • No retrenchments are anticipated as a result of the transaction; affected employees will be transferred on terms no less favourable than their current conditions.