Phodiclinics and Others v Protector Group Medical Services (Pty) Ltd (in Liquidation) and Others (122/LM/Dec05) [2006] ZACT 102 (21 February 2006)

Parties

Procedural Posture

Large Merger Review / Reasons for Unconditional Approval After Contested Hearing

Legal Issues

1. 1 Whether the acquisition of Protector Group assets by Phodiclinics and DJF Defty would substantially lessen competition in relevant markets.
2. 2 Whether New Protector Group Holdings constituted a failing firm under the Competition Act and international standards.
3. 3 Whether the merger would result in anti-competitive effects in local markets, particularly the Vaal Triangle and Kathu.

Ratio Decidendi

The Tribunal found that New Protector Group Holdings was a failed firm unable to meet its financial obligations or reorganize successfully, and that only one unconditional offer for its assets was made by the merging parties. The sale process was open and reasonable alternatives were not forthcoming, as all other offers were conditional on increased IDC exposure and thus not capable of acceptance. The merger would result in increased tariffs for private patients but not materially affect medical scheme members due to national tariff agreements and the small market share involved. While the transaction would increase concentration in local markets, particularly the Vaal Triangle and Kathu,...

Court Disposition

Merger approved unconditionally.

Orders

• The large merger involving the acquisition by Phodiclinics (Pty) Ltd and DJF Defty (Pty) Ltd of the assets of New Protector Group Holdings (Pty) Ltd and other target companies is approved unconditionally.
• No conditions are imposed on the transaction.