New Republic Bank Limiteda (subsidiary of Saambou Holdings Limited) and FBC Fidelity Bank Limited (a subsidiary of Nedcor Bank Limited) (42/LM/Jul01) [2001] ZACT 37 (21 September 2001)

New Republic Bank Limiteda (subsidiary of Saambou Holdings Limited) and FBC Fidelity Bank Limited (a subsidiary of Nedcor Bank Limited) (42/LM/Jul01) [2001] ZACT 37 (21 September 2001)

The Tribunal found that the relevant market is the provision of rental and installment sale agreement services for office automation equipment, which is a specialized segment distinct from other asset financing such as vehicle finance. The post-merger market share of the combined entity is estimated at 2.3%, which is not significant enough to raise competition concerns, especially given the competitive nature of the market and low barriers to entry. The Tribunal accepted that all major banks participate in this market and that entry is relatively easy. No public interest concerns, including employment effects, were identified. Accordingly, the merger was approved without conditions.

Citation
[2001] ZACT 37
Parties
Applicant: New Republic Bank Limited; Respondent: FBC Fidelity Bank Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
21 September 2001
Case Number
42/LM/Jul01
Procedural Posture
Large Merger / Merger Approval
Outcome
Merger approved without conditions.
Judges
D.H. Lewis, N. Manoim, D. Terblanche
Legal Topics
Large Merger Review, Asset Financing Market Definition, Market Share Analysis, Public Interest Considerations
Competition Law Banking and Finance Large Merger Review Asset Financing Market Definition Market Share Analysis Public Interest Considerations

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Parties

New Republic Bank Limited

Applicant

FBC Fidelity Bank Limited

Respondent

Procedural Posture

Large Merger / Merger Approval

Legal Issues

  1. 1 Whether the acquisition of rental and installment sale agreements by NRB from FBC will substantially lessen competition in the office automation equipment financing market.
  2. 2 Whether the transaction raises any public interest concerns, including effects on employment.

Ratio Decidendi

The Tribunal found that the relevant market is the provision of rental and installment sale agreement services for office automation equipment, which is a specialized segment distinct from other asset financing such as vehicle finance. The post-merger market share of the combined entity is estimated at 2.3%, which is not significant enough to raise competition concerns, especially given the competitive nature of the market and low barriers to entry. The Tribunal accepted that all major banks participate in this market and that entry is relatively easy. No public interest concerns, including employment effects, were identified. Accordingly, the merger was approved without conditions.

Court Disposition

Merger approved without conditions.

Orders

  • The merger between New Republic Bank Limited and FBC Fidelity Bank Limited is approved in terms of section 16(2)(a) of the Competition Act, without conditions.