COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No.: 60/LM/JUN07
In the matter between:
BARCLAYS PLC Primary Acquiring Firm
and
ABN AMRO HOLDING N.V Primary Target Firm
_______________________________________________________________
Panel : DH Lewis (Presiding Member), N Manoim (Tribunal
Member), and M Mokuena (Tribunal Member)
Heard on : 8 August 2007
Order issued on: 8 August 2007
Reasons issued on: 13 August 2007
REASONS FOR DECISION
APPROVAL
[1] The Competition Tribunal issued a Merger Clearance Certificate on 08
August 2007, approving without conditions the proposed merger between
Barclays PLC (“Barclays”) and ABN AMRO Holding N.V (“ABN AMRO”). The
reasons are as follows:
THE MERGER TRANSACTION
[2] The primary acquiring firm is Barclays PLC (“Barclays”), a public
company which is incorporated in England and Wales, and which its principal
place of business is London, United Kingdom. Barclays has only one direct
subsidiary; Barclays Bank PLC, which is also incorporated in England and
Wales, and has a substantial number of subsidiaries worldwide, which includes
a substantial number in South Africa. 1
1 These include among others; Absa Bank Limited; AbsaAsset Management nominees (Pty)
[3] The primary target firm is ABN AMRO Holding N.V (“ABN AMRO”), a
public company which is incorporated in the Netherlands, where its principal
business place is also found. ABN AMRO also has numerous subsidiaries
worldwide, except in South Africa where it operates a branch in Johannesburg,
Sandton.
[4] Barclays intends to acquire 100% of the shares in ABN AMRO either
directly or through subsidiary, and in exchange that ABN AMRO’s existing
ordinary shareholders will acquire 48% of the shares in the combined entity.
That way Barclays’ existing ordinary shareholders will own 52% of the shares in
the combined entity, while ABN AMRO’s existing ordinary shareholders will own
the balance of 48% of the shares in the combined entity.
[5] Approval by the banking regulator is not required as ABN AMRO is not a
registered bank in South Africa but a branch of a foreign bank.
RATIONALE FOR THE TRANSACTION
[6] The rationale for this merger appears to be Barclays’ desire to expand its
scale globally.
THE RELEVANT MARKET
[7] In South Africa Barclays operates mainly through ABSA, and ABN
AMRO’s operation scale and activities are minimal in South Africa. This is an
international merger, however the effects on the South African market are
trifling. The parties’ activities reflect a clear but limited overlap in the segments
of financial services and corporate banking. At the hearing we were advised that
ABN AMRO was principally in the South African market to provide a local
service to its international clients, who did business in this country. It had also
expanded to provide services to some other corporate clients, but it would seem
that this business is small.
COMPETITION EVALUATION
[8] There is no reason to delve in the details of the market share analysis in
[8] There is no reason to delve in the details of the market share analysis in
this merger as the effect thereof in the relevant South African markets are
glaringly trivial. The overall post merger market share in the national market for
the provision of corporate banking and financial services are low.
CONCLUSION
Ltd; Absa Fleet Services Ltd; Absa Group Ltd; Allan Grey Property trust Nominees (Pty)Ltd;
Alberton Industrial Properties (Pty) Ltd; Barclays International Funds (South Africa),etc.
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[9] We are satisfied that the proposed transaction is unlikely to result in a
substantial lessening or prevention of competition both in the national and
international markets for the provision of corporate banking and financial
services. There are no public interest issues. We accordingly approve the
proposed transaction unconditionally.
_______________
N Manoim
Tribunal Member
D Lewis and M Mokuena concur in the judgment of N Manoim.
Tribunal Researcher: L Xaba
For Barclays PLC : V Koovejee (Deneys Reitz)
For ABN AMRO : R Labuschagne (Bowman and Gilfillan)
For the Commission : M Mohlala and I Selaledi
(Mergers and Acquisitions)
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