PSG Investment Bank Holdings Ltd and Real Africa Durolink Holdings Ltd (31/LM/May01) [2001] ZACT 27 (17 July 2001)

PSG Investment Bank Holdings Ltd and Real Africa Durolink Holdings Ltd (31/LM/May01) [2001] ZACT 27 (17 July 2001)

The Tribunal found that the combined market share of the merged entity in all relevant product markets would be less than 15%, and the increase in market concentration (HHI) would be less than 50 points. The banking and financial services sector is broad, with the five largest banks accounting for 95% of the treasury services market, leaving the merged entity to compete for the remaining 5%. The Tribunal concluded that competition would not be substantially prevented or lessened by the merger. Public interest considerations, including the ability of small banks to grow, black economic empowerment, and the avoidance of negative ripple effects from RAD's potential exit, further supported...

Citation
[2001] ZACT 27
Parties
Applicant: PSG Investment Bank Holdings Ltd; Respondent: Real Africa Durolink Holdings Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
17 July 2001
Case Number
31/LM/May01
Procedural Posture
Large Merger / Merger Approval
Outcome
Merger approved without conditions.
Judges
D.H. Lewis, S. Zilwa, D. Terblanche
Legal Topics
Large Merger Review, Market Share Analysis, Public Interest Consideration, Black Economic Empowerment
Competition Law Banking and Finance Large Merger Review Market Share Analysis Public Interest Consideration Black Economic Empowerment

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Parties

PSG Investment Bank Holdings Ltd

Applicant

Real Africa Durolink Holdings Ltd

Respondent

Procedural Posture

Large Merger / Merger Approval

Legal Issues

  1. 1 Whether the proposed merger between PSG Investment Bank Holdings Ltd and Real Africa Durolink Holdings Ltd will substantially prevent or lessen competition in the relevant markets.
  2. 2 Whether there are any public interest grounds that justify or oppose the merger.

Ratio Decidendi

The Tribunal found that the combined market share of the merged entity in all relevant product markets would be less than 15%, and the increase in market concentration (HHI) would be less than 50 points. The banking and financial services sector is broad, with the five largest banks accounting for 95% of the treasury services market, leaving the merged entity to compete for the remaining 5%. The Tribunal concluded that competition would not be substantially prevented or lessened by the merger. Public interest considerations, including the ability of small banks to grow, black economic empowerment, and the avoidance of negative ripple effects from RAD's potential exit, further supported...

Court Disposition

Merger approved without conditions.

Orders

  • The merger between PSG Investment Bank Holdings Ltd and Real Africa Durolink Holdings Ltd is approved without conditions.
  • A Merger Clearance Certificate is issued.