Business Venture Investments 904 (Pty) Limited and Certain Businesses of Momentum Group Ltd / mCubed Holdings Ltd (85/LM/Oct04) [2005] ZACT 8; [2005] 1 CPLR 216 (CT) (21 January 2005)

Business Venture Investments 904 (Pty) Limited and Certain Businesses of Momentum Group Ltd / mCubed Holdings Ltd (85/LM/Oct04) [2005] ZACT 8; [2005] 1 CPLR 216 (CT) (21 January 2005)

The Tribunal found that the merger would not substantially lessen or prevent competition in any relevant market, whether defined broadly as asset management or narrowly as multi-management. The merged entity's market share in structured products was below 1%, and in asset management, it would be 26.3%. If multi-management is considered a separate market, the merged share would be 45.86%, but entry is easy and recent entrants demonstrate competitive dynamics. Clients in the retirement fund industry possess significant countervailing power and can easily switch providers. Vertical relationships identified were not extensive enough to raise concerns. No public interest issues, such as...

Citation
[2005] ZACT 8
Parties
Applicant: Business Venture Investments 904 (Pty) Limited; Respondent: Momentum Group Ltd; Respondent: mCubed Holdings Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
21 January 2005
Case Number
85/LM/Oct04
Procedural Posture
Large Merger / Merger Clearance Approval
Outcome
Merger approved unconditionally.
Judges
Norman Manoim, David Lewis, Mbuyiseli Madlanga
Legal Topics
Large Merger Review, Market Definition, Horizontal and Vertical Relationships, Public Interest, Market Concentration, Multi Management Services
Competition Law Commercial and Corporate Large Merger Review Market Definition Horizontal and Vertical Relationships Public Interest Market Concentration Multi Management Services

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 2 Party arguments 2 Amounts and remedies 3
Sign in to unlock

Parties

Business Venture Investments 904 (Pty) Limited

Applicant

Momentum Group Ltd

Respondent

mCubed Holdings Ltd

Respondent

Procedural Posture

Large Merger / Merger Clearance Approval

Legal Issues

  1. 1 Whether the proposed merger would substantially lessen or prevent competition in the relevant markets.
  2. 2 Whether the transaction raises any public interest concerns, including staff retrenchment.
  3. 3 How market definition affects the assessment of competitive impact.

Ratio Decidendi

The Tribunal found that the merger would not substantially lessen or prevent competition in any relevant market, whether defined broadly as asset management or narrowly as multi-management. The merged entity's market share in structured products was below 1%, and in asset management, it would be 26.3%. If multi-management is considered a separate market, the merged share would be 45.86%, but entry is easy and recent entrants demonstrate competitive dynamics. Clients in the retirement fund industry possess significant countervailing power and can easily switch providers. Vertical relationships identified were not extensive enough to raise concerns. No public interest issues, such as...

Court Disposition

Merger approved unconditionally.

Orders

  • The merger between Business Venture Investments 904 (Pty) Limited, certain businesses of Momentum Group Ltd, and mCubed Holdings Ltd is approved without conditions.
  • No staff retrenchment programme is envisaged pursuant to this merger.