Old Mutual (South Africa) Ltd v Medscheme Life Assurance Ltd (10/LM/Jan09) [2009] ZACT 23; [2009] 1 CPLR 207 (CT) (1 April 2009)

Old Mutual (South Africa) Ltd v Medscheme Life Assurance Ltd (10/LM/Jan09) [2009] ZACT 23; [2009] 1 CPLR 207 (CT) (1 April 2009)

The Tribunal found that the proposed merger between Old Mutual (South Africa) Ltd and Medscheme Life Assurance Ltd would result in a combined market share of less than 20% in the long-term insurance market, with Medscheme Life contributing less than 1%. The change in market concentration, as measured by the HHI, was insignificant. The merged entity would continue to face effective competition from several other firms with substantial market shares. The Tribunal accepted the Commission's view that the transaction was not linked to other contemporaneous transactions and that any joint marketing arrangements would be considered separately. No public interest concerns were identified....

Citation
[2009] ZACT 23
Parties
Applicant: Old Mutual (South Africa) Ltd; Respondent: Medscheme Life Assurance Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
1 April 2009
Case Number
10/LM/Jan09
Procedural Posture
Merger Control / Merger Clearance
Outcome
Merger unconditionally approved.
Judges
N Manoim, U Bhoola, M Mokuena
Legal Topics
Merger Control, Market Share Analysis, Public Interest, Long Term Insurance, Horizontal Merger
Competition Law Commercial and Corporate Merger Control Market Share Analysis Public Interest Long Term Insurance Horizontal Merger

Case Brief

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Parties

Old Mutual (South Africa) Ltd

Applicant

Medscheme Life Assurance Ltd

Respondent

Procedural Posture

Merger Control / Merger Clearance

Legal Issues

  1. 1 Whether the proposed merger between Old Mutual (South Africa) Ltd and Medscheme Life Assurance Ltd is likely to substantially prevent or lessen competition in the market for long-term insurance in South Africa.
  2. 2 Whether there are any public interest concerns arising from the merger.
  3. 3 Whether the transaction is linked to other contemporaneous transactions involving the parties.

Ratio Decidendi

The Tribunal found that the proposed merger between Old Mutual (South Africa) Ltd and Medscheme Life Assurance Ltd would result in a combined market share of less than 20% in the long-term insurance market, with Medscheme Life contributing less than 1%. The change in market concentration, as measured by the HHI, was insignificant. The merged entity would continue to face effective competition from several other firms with substantial market shares. The Tribunal accepted the Commission's view that the transaction was not linked to other contemporaneous transactions and that any joint marketing arrangements would be considered separately. No public interest concerns were identified....

Court Disposition

Merger unconditionally approved.

Orders

  • The merger between Old Mutual (South Africa) Ltd and Medscheme Life Assurance Ltd is unconditionally approved.
  • No conditions are imposed on the approval of the merger.