About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Competition Tribunal
SAFLII
>>
Databases
>>
South Africa: Competition Tribunal
>>
2025
>>
[2025] ZACT 17
|
|
Old Mutual Life Assurance Company (South Africa) Limited v Guardrisk Life Ltd (LM150Jan25) [2025] ZACT 17 (17 March 2025)
COMPETITION TRIBUNAL
REPUBLIC OF SOUTH
AFRICA
Case No.: LM150Jan25
In
the matter between:
Old
Mutual Life Assurance Company (South Africa)
Primary
Acquiring Firm
Limited
And
Guardrisk
Life Ltd, rights and obligations pertaining
Primary
Target
Firm
to
life insurance annuity policy number 400001
issued
for the benefit of eligible employees of Murray
and
Roberts Ltd
Panel:
I Valodia (Presiding Member)
A
Ndoni (Tribunal Member)
G
Budlender (Tribunal Member)
Heard
on:
04 March 2025
Decided
on:
04 March 2025
Reasons Issued
on: 17 March
2025
REASONS FOR DECISION
Introduction
[1]
On 04 March 2025, the Competition Tribunal
(“Tribunal”) unconditionally approved the large merger in
which Old Mutual
Life Assurance Company (“OMLACSA”)
intends to acquire from, Guardrisk Life Limited (“Guardrisk”),
the rights
and obligations pertaining to a life insurance annuity
policy (with policy number 400001) (“the Transfer Policy”)
issued
by Guardrisk for the benefit of certain eligible employees of
Murray and Roberts Limited (qua policyholder).
Parties and activities
[2]
The primary acquiring firm is OMLACSA, a
licensed life insurer authorised to provide various insurance
products. OMLACSA is wholly
owned by Old Mutual Emerging Markets
Limited, which is ultimately owned by Old Mutual Limited
(collectively referred to as the
“Acquiring Group”).
[3]
The primary target firm is the Transfer
Policy held by Guardrisk. Guardrisk is ultimately controlled by
Momentum Metropolitan Holdings
Limited (“MMH”).
Transaction
[4]
The
policyholder, Murray and Roberts owes post-retirement medical aid
(“PRMA”) benefits to certain of its employees
and their
beneficiaries (“the Eligible Employees”). In terms of
this arrangement, Murray and Roberts will pay a certain
amount of
medical scheme contributions to the Murray and Roberts Medical Scheme
(“the Scheme”) for the Eligible Employees.
[1]
[5]
On 11 December 2003, Murray and Roberts
concluded a post-retirement medical aid (“PRMA”) Annuity
Policy with Guardrisk,
to fund Murray and Roberts’ liability
towards the Eligible Employees by paying their medical aid
contributions, after they
retire.
[6]
Murray
and Roberts has instructed Guardrisk to transfer the PRMA Annuity
Policy to OMLACSA. Accordingly, Guardrisk, Murray and Roberts
and
OMLCSA will enter into a Transfer Agreement in terms of section 50 of
the Insurance Act,
[2]
in terms
of which Guardrisk will cede all its rights, title and interest in
and to the Transfer Policy and delegate all liabilities
in respect
thereof to OMLACSA. Post-merger, OMLACSA will replace Guardrisk as
the insurer of the Transfer Policy.
Competition
assessment
[7]
The Commission considered the activities of
the merging parties and found that there exists an overlap in the
broad market for the
provision of long-term insurance
products/services. In this respect, Guardrisk and OMLACSA are both
licenced life insurers and
participate in risk and investment type
long-term insurance business, as well as individual and group
business. Further, the Transfer
Policy pertains to life insurance
annuity business which is offered to a group.
[8]
As such, the Commission assessed the impact
of the proposed transaction on, (i) the broad market for the
provision of long-term
insurance products and services; and (ii) the
narrow market for the provision of PRMA products/services.
Broad Market for the
provision of long-term insurance products/services
[9]
The merging parties submitted that
post-merger, the Acquiring Group will have an estimated market share
of […]%, with a […]%
accretion.
[10]
Relying
on
market
share
estimates
obtained
from
the
Prudential
Authority (2023), the Commission found that
the Acquiring Group has an estimated market share of […]% and
Guardrisk (issuer
of the Transfer Policy as a company) has an
estimated market share of […]%. Further, that post-merger, the
merged
entity
will
have
an
estimated
market
share
of […]%,
with
an
accretion of less than […]%.
Narrow national market
for the provision of PRMA products and services
[11]
Relying
on
market
share
estimates
obtained
from
the
Prudential
Authority (2023), the Commission found that
the Acquiring Group has an estimated market
share
of
[…]%
and
Guardrisk
(issuer
of
the
Transfer
Policy
as
a
company) has an estimated market share of […]%, with the
Transfer Policy accounting for […]% of Guardrisk’s
total
assets and liabilities.
[12]
The merging parties estimated that
post-merger the Acquiring Group have an estimated market share of
[…]% with an accretion
of […]%.
Conclusion on
competition assessment
[13]
In assessing whether the proposed
transaction will substantially prevent or lessen competition in the
relevant markets The Commission
argued that post-merger the merged
entity’s market shares in each market, are less than 35%. In
addition, both the merger
parties and the Commission submitted that
the merged entity will continue to face competition in each market
from other players
such as Sanlam, MMH and the Liberty Group. We
concur with the views of the Commission.
Public interest
assessment
Employment
[14]
The merger parties submitted that the
proposed merger will not have any detrimental effects on employment.
Both employee representatives
of OMLACSA and Guardrisk confirmed that
the employees were notified of the proposed transaction and no
concerns were raised.
[15]
The Commission accepted the merger parties’
submissions and concluded that the proposed transaction is unlikely
to raise any
employment concerns. We concur.
Promotion of a greater
spread of ownership by HDPs and workers in firms in the market
[16]
The Acquiring Group has 44.57% (using
voting rights) of its shareholding held by HDPs. MMH (the ultimate
controller of Guardrisk)
has 38.13% (using voting rights) of its
shareholding held by HDPs.
[17]
No other public interest issues arise from
the proposed transaction.
[18]
No third party expressed any public
interest concerns about the proposed transaction.
Conclusion
[19]
For the reasons set out above, we are
satisfied that the proposed transaction is unlikely to substantially
prevent or lessen competition
in any relevant market. Furthermore,
the proposed transaction raises no public interest concerns.
[20]
We therefore approve the proposed
transaction without conditions.
Signed by:Imraan Valodia
Signed at:2025-03-17
16:48:33 +02:00
Reason:Witnessing Imraan
Valodia
Presiding
Member
17 March 2025
Prof. Imraan
Valodia
Date
Ms. Andiswa Ndoni and
Adv. Geoff Budlender SC concurring.
Tribunal
Case Managers:
Karabo
Orekeng
For
the Merger Parties:
Susan
Meyer and Robin Henney of Cliffe Dekker Hofmeyr
For
the Commission:
Billy
Mabatamela and Grashum Mutizwa
[1]
The
benefits will accrue only in respect of those employees that
commenced their employment with Murray and Roberts prior to 1
July
1996 and those who reached retirement age while in Murray and
Roberts’ employ.
[2]
Act
No 18 of 2017.