Old Mutual Investments Group (South Africa) (Pty) Ltd v Future Growth Asset Management (Pty) Ltd (71/LM/Jun08) [2008] ZACT 107; [2009] 1 CPLR 201 (CT) (8 December 2008)

Old Mutual Investments Group (South Africa) (Pty) Ltd v Future Growth Asset Management (Pty) Ltd (71/LM/Jun08) [2008] ZACT 107; [2009] 1 CPLR 201 (CT) (8 December 2008)

The Tribunal found that the combined post-merger market shares of the parties in asset management services, fixed income, and equity funds were relatively low and that the market remained competitive with numerous effective competitors. Although the transaction would result in the removal of a credible competitor, Future Growth would continue to operate as a separate entity, and customers could easily switch providers. Barriers to entry, while present, were not insurmountable, as evidenced by the increasing number of registered asset managers. The Tribunal concluded that the transaction was unlikely to substantially lessen or prevent competition in the relevant markets and did not raise...

Citation
[2008] ZACT 107
Parties
Applicant: Old Mutual Investments Group (South Africa) (Pty) Ltd; Respondent: Future Growth Asset Management (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
8 December 2008
Case Number
71/LM/Jun08
Procedural Posture
Merger Application / Tribunal Approval and Reasons
Outcome
The merger was approved without conditions.
Judges
D Lewis, Y Carrim, N Manoim
Legal Topics
Merger Control, Asset Management Services, Market Definition, Barriers to Entry, Countervailing Power
Competition Law Commercial and Corporate Merger Control Asset Management Services Market Definition Barriers to Entry Countervailing Power

Case Brief

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Parties

Old Mutual Investments Group (South Africa) (Pty) Ltd

Applicant

Future Growth Asset Management (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Tribunal Approval and Reasons

Legal Issues

  1. 1 Whether the proposed acquisition would result in a substantial lessening or prevention of competition in the markets for asset management, fixed income, and equity management services.
  2. 2 Whether the transaction raises any significant public interest concerns.

Ratio Decidendi

The Tribunal found that the combined post-merger market shares of the parties in asset management services, fixed income, and equity funds were relatively low and that the market remained competitive with numerous effective competitors. Although the transaction would result in the removal of a credible competitor, Future Growth would continue to operate as a separate entity, and customers could easily switch providers. Barriers to entry, while present, were not insurmountable, as evidenced by the increasing number of registered asset managers. The Tribunal concluded that the transaction was unlikely to substantially lessen or prevent competition in the relevant markets and did not raise...

Court Disposition

The merger was approved without conditions.

Orders

  • The acquisition by Old Mutual Investments Group (South Africa) (Pty) Ltd of Future Growth Asset Management (Pty) Ltd is approved.
  • No conditions are attached to the approval.