Liberty Group Limited and Investec Employee Benefits Limited (106/LM/Nov05) [2006] ZACT 10 (14 February 2006)

Liberty Group Limited and Investec Employee Benefits Limited (106/LM/Nov05) [2006] ZACT 10 (14 February 2006)

The Tribunal found that regardless of whether the relevant market is defined narrowly as investment management services to retirement funds or broadly as asset management services, the merged entity's market share would remain low (11.2% in the broad market, 5.8% in the narrow market). The market is characterized by many competitors, with Old Mutual and Sanlam holding larger shares. Barriers to entry are low, evidenced by ten new entrants since 2003. The Tribunal concluded that the merger is unlikely to result in a substantial lessening of competition. No public interest concerns were identified.

Citation
[2006] ZACT 10
Parties
Applicant: Liberty Group Limited; Respondent: Investec Employee Benefits Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
14 February 2006
Case Number
106/LM/Nov05
Procedural Posture
Large Merger Review / Merger Approval
Outcome
Merger approved; no substantial lessening of competition or public interest concerns identified.
Judges
Y Carrim, L Reyburn, U Bhoola
Legal Topics
Merger Control, Market Definition, Asset Management Services
Competition Law Commercial and Corporate Merger Control Market Definition Asset Management Services

Case Brief

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Parties

Liberty Group Limited

Applicant

Investec Employee Benefits Limited

Respondent

Procedural Posture

Large Merger Review / Merger Approval

Legal Issues

  1. 1 Whether the acquisition of the Investment Only Business of Investec Employee Benefits Limited by Liberty Group Limited would substantially lessen competition in the relevant market.
  2. 2 Whether the transaction raises any public interest concerns.

Ratio Decidendi

The Tribunal found that regardless of whether the relevant market is defined narrowly as investment management services to retirement funds or broadly as asset management services, the merged entity's market share would remain low (11.2% in the broad market, 5.8% in the narrow market). The market is characterized by many competitors, with Old Mutual and Sanlam holding larger shares. Barriers to entry are low, evidenced by ten new entrants since 2003. The Tribunal concluded that the merger is unlikely to result in a substantial lessening of competition. No public interest concerns were identified.

Court Disposition

Merger approved; no substantial lessening of competition or public interest concerns identified.

Orders

  • The merger between Liberty Group Limited and the Investment Only Business of Investec Employee Benefits Limited is approved.