M & G FA Limited v Prudential Portfolio Managers (South Africa) (Pty) Ltd (LM006Apr21) [2021] ZACT 40 (25 May 2021)
- Citation
- [2021] ZACT 40
- Status
- Order
- Jurisdiction
- South Africa
- Court
- Competition Tribunal
- Panel
- E Daniels, Y Carrim, A Ndoni
- Case number
- LM006Apr21
More details
- Court
- Competition Tribunal
- Panel
- E Daniels, Y Carrim, A Ndoni
- Case number
- LM006Apr21
On this page
Professional case brief
Research organized from the available case record
01
Holding and result
The Tribunal found that the proposed transaction, involving M&G FA Limited increasing its shareholding in PPMSA from 49.99% to 50.12%, would not result in any substantial prevention or lessening of competition. The merged entity's market share would remain below 3%, with no market share accretion, and it would continue to be constrained by larger competitors. No public interest concerns were identified, and no third parties raised objections. Accordingly, the Tribunal approved the merger unconditionally.
Court disposition
Merger unconditionally approved.
Orders
- The merger between M&G FA Limited and Prudential Portfolio Managers (South Africa) (Pty) Ltd is approved in terms of section 16(2)(a) of the Competition Act, 1998.
- A Merger Clearance Certificate is to be issued in terms of Competition Tribunal Rule 35(5)(a).
02
Material facts
Parties
M&G FA Limited
Applicant Counsel: Stuart StrachanPrudential Portfolio Managers (South Africa) (Pty) Ltd
RespondentAmounts and remedies
- Post Merger Market Share: 3
- Shareholding Acquired: 0.13
- Total Shareholding Post Merger: 50.12
03
Procedural history
Posture
Merger Application / Final Determination
04
Questions and positions
Legal issues
- 01
Whether the proposed merger would substantially prevent or lessen competition in any relevant market.
- 02
Whether the merger raises any public interest concerns.
Party arguments
- Applicant
- The applicant argued that the acquisition of a further 0.13% shareholding in PPMSA, increasing its total shareholding to 50.12%, would not result in any material change to the competitive dynamics of the market. The merged entity would remain constrained by larger competitors and would not gain significant market power.
- Respondent
- The respondent, through the Competition Commission, submitted that the merger would not result in market share accretion, as the merged entity would hold less than 3% market share post-merger. The Commission found no evidence of competition concerns or public interest issues and recommended unconditional approval.
05
Court’s reasoning
Legal principles
- 01
Competition Act, 1998, section 16(2)(a)
A merger may not be approved if it is likely to substantially prevent or lessen competition, unless justified on public interest grounds.
- 02
Competition Act, 1998
Control is established when a shareholder crosses the threshold of 50% ownership, conferring the ability to materially influence policy and strategic decisions.
06
Ratio, limits and disposition
Ratio decidendi
The Tribunal found that the proposed transaction, involving M&G FA Limited increasing its shareholding in PPMSA from 49.99% to 50.12%, would not result in any substantial prevention or lessening of competition. The merged entity's market share would remain below 3%, with no market share accretion, and it would continue to be constrained by larger competitors. No public interest concerns were identified, and no third parties raised objections. Accordingly, the Tribunal approved the merger unconditionally.
Obiter and limits
- The Tribunal noted that the transaction did not attract any opposition from third parties, indicating a lack of concern in the market.
- The assessment confirmed that the merger would not alter the competitive landscape, given the presence of significant competitors.
Court disposition
Merger unconditionally approved.
- The merger between M&G FA Limited and Prudential Portfolio Managers (South Africa) (Pty) Ltd is approved in terms of section 16(2)(a) of the Competition Act, 1998.
- A Merger Clearance Certificate is to be issued in terms of Competition Tribunal Rule 35(5)(a).
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
Order
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No.: LM006Apr21
In the matter between:
M&G FA Limited
Primary Acquiring Firm
And
Prudential Portfolio Managers (South Africa) (Pty) Ltd Primary Target Firm
Panel:
E Daniels (Presiding Member)
Y Carrim (Tribunal Panel Member) A Ndoni (Tribunal Panel Member)
Heard on: 25
May 2021
Order Issued on: 25 May 2021
Reasons Issued on: 25 May 2021
ORDER
Further to the recommendation of the Competition Commission in terms of section 14A(1)(b) of the Competition Act, 1998 (“the Act”) the Competition Tribunal orders that–
1. the merger between the abovementioned parties be approved in terms of section 16(2)(a) of the Act; and
2. a Merger Clearance Certificate be issued in terms of Competition Tribunal Rule 35(5)(a).
Presiding Member Mr Enver Daniels Date:
25 May 2021
Concurring: Ms Yasmin Carrim and Ms Andiswa Ndoni
Case no: LM006Apr21
M&G FA Limited (Primary Acquiring Firm)
Prudential Portfolio Managers (South Africa) (Pty) Ltd (Primary Target Firm)
Heard on: 25 May 2021
Order Issued on: 25 May 2021
REASONS FOR DECISION
[1] On 25 May 2021, the Competition Tribunal unconditionally approved a large merger between M&G FA Limited (“M&G”) and Prudential Portfolio Managers (South Africa) (Pty) Ltd (“PPMSA”).
[2] M&G is acquiring 0.13% of the shares in PPMSA from Thesele Asset Management No 2 (RF) (Pty) Ltd, such that M&G will increase its shareholding from 49.99% to 50.12% in PPMSA, therefore crossing the bright lines, indicating control under the Act.
[3] M&G is owned by M&G plc and is a shareholder in PPMSA. The shares in PPMSA are held by M&G, Prudential Staff Investment Company (RF) (Pty) Ltd, Thesele Asset Management (RF) (Pty) Ltd (“TAM 1”) and Thesele Asset Management No.2 (RF) (Pty) Ltd (“TAM 2”).
[4] M&G is a leading international savings and investment business, responsible for the management of individual and institutional investments, and PPMSA is an investment/asset manager on behalf of retail and institutional investors in South Africa.
[5] In its competition assessment, the only overlap that was found by the Competition Commission (“Commission”) relates to the fact that M&G holds 49.99% shareholding in PPMSA. In assessing the market shares, the Commission found that post-merger, the merged entity will have less than 3% market share, with no market share accretion. Additionally, the merged entity will still be constrained by larger players such as Old Mutual Investment Group, Stanlib, Sanlam Investments and Coronation, among others.
[6] The Commission is therefore of the view that the proposed merger is unlikely to substantially prevent or lessen competition.
[7] The merger raises no public interest concerns.
[8] No third parties raised any concerns.
[9] We concluded that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market, or to have a negative impact on public interest.
Mr Enver Daniels
Date: 25 May 2021
Ms Yasmin Carrim and Ms Andiswa Ndoni concurring.
Tribunal Case Manager:
Camilla Mathonsi
For the Merging Parties:
Stuart Strachan
For the Commission:
Zintle Siyo and Mogau Aphane
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