Standard Bank of South Africa Ltd and RCS Investment Holdings (Pty) Ltd (90/LM/Sep05) [2005] ZACT 88 (29 November 2005)

Standard Bank of South Africa Ltd and RCS Investment Holdings (Pty) Ltd (90/LM/Sep05) [2005] ZACT 88 (29 November 2005)

The Tribunal found that the proposed merger would not result in any significant changes within the identified product markets. Both the retail credit and personal finance markets are characterized by vigorous competition and low market shares for the merging parties. The presence of numerous alternative suppliers and recent market entrants indicates low entry barriers. The evidence did not support any substantial lessening or prevention of competition, regardless of market definition. No public interest concerns were identified. Accordingly, the merger was unconditionally approved.

Citation
[2005] ZACT 88
Parties
Applicant: Standard Bank of South Africa Ltd; Respondent: RCS Investment Holdings (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
29 November 2005
Case Number
90/LM/Sep05
Procedural Posture
Large Merger Review / Merger Approval
Outcome
Merger unconditionally approved.
Judges
N Manoim, Y Carrim, M Holden
Legal Topics
Large Merger Review, Market Definition, Joint Control, Market Share Analysis, Entry Barriers
Competition Law Banking and Finance Large Merger Review Market Definition Joint Control Market Share Analysis Entry Barriers

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Parties

Standard Bank of South Africa Ltd

Applicant

RCS Investment Holdings (Pty) Ltd

Respondent

Procedural Posture

Large Merger Review / Merger Approval

Legal Issues

  1. 1 Whether the proposed acquisition by Standard Bank of a 45% shareholding in RCS Investment Holdings raises competition concerns under the Competition Act.
  2. 2 Whether the transaction would result in a substantial lessening or prevention of competition in the relevant markets.
  3. 3 Whether any public interest issues arise from the transaction.

Ratio Decidendi

The Tribunal found that the proposed merger would not result in any significant changes within the identified product markets. Both the retail credit and personal finance markets are characterized by vigorous competition and low market shares for the merging parties. The presence of numerous alternative suppliers and recent market entrants indicates low entry barriers. The evidence did not support any substantial lessening or prevention of competition, regardless of market definition. No public interest concerns were identified. Accordingly, the merger was unconditionally approved.

Court Disposition

Merger unconditionally approved.

Orders

  • The proposed merger between Standard Bank of South Africa Ltd and RCS Investment Holdings (Pty) Ltd is unconditionally approved.