COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 122/LM/Nov08
In the matter between:
Her Majesty’s Treasury Acquiring Firm
and
The Royal Bank of Scotland Group Plc Target Firm
Panel : D Lewis (Presiding Member), Y Carrim (Tribunal
Member) and N Manoim (Tribunal Member)
Heard on : 03 December 2008
Order issued on : 03 December 2008
Reasons issued on : 13 February 2009
Reasons for Decision
Introduction
[1] On 03 December 2008 the Tribunal approved the acquisition by Her
Majesty’s Treasury of the Royal Bank of Scotland Group Plc. The reasons
follow below.
Parties
[2] The primary acquiring firm is her Majesty’s Treasury (“HM Treasury”), the
United Kingdom’s Economics and Finance Ministry. HM Treasury is controlled
by the government of the United Kingdom. HM Treasury does not control any
firm in South Africa.
[3] The primary target firm is the Royal Bank of Scotland Group Plc (“RBS”), a
company incorporated under the laws of Scotland and listed on the London
Stock Exchange. No single shareholder controls RBS. It has in excess of fifty
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subsidiaries worldwide. In South Africa, RBS is active through ABN AMRO,
which operates a branch in Johannesburg.
Transaction
[4] In terms of the structure of the transaction, HM Treasury intends to acquire
57.9% share in RBS.
Rationale
[5] The parties submit that the deteriorating conditions in the financial markets,
which led to the failure of various institutions worldwide, have resulted in the
waning of investor confidence in the financial system. These concerns have
compelled governments around the world to introduce measures to stabilize
the financial markets.
[6] On 08 October 2008, the United Kingdom Government announced a range of
measures designed to ensure the stability of the financial system and to
protect various interest groups including savers, depositors, businesses and
borrowers. These measures include the provision of liquidity, funding support
and facilities to enable banks to raise new capital so as to strengthen their
capital base. This transaction is therefore aimed at rescuing RBS.
Parties’ Activities
[7] HM Treasury is the United Kingdom’s Economics and Finance Ministry which
does not have any business activity in South Africa.
[8] RBS is a banking and financial services group which provides retail banking,
insurance, corporate banking, investment banking, financial market products,
payment systems and private equity. In South Africa, RBS is active through
ABN AMRO. ABN AMRO provides wholesale banking primarily to listed
corporate, government owned entities, financial institutions and multinational
clients with a presence in South Africa.
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Competition Analysis
[9] There is no overlap in the activities of the merging parties as the primary
acquiring firm is not active in South Africa.
[10] In light of the above the Tribunal finds that the proposed transaction is
unlikely to substantially prevent or lessen competition.
Public Interest
[11] The transaction does not raise any significant public interest concerns.
___________________ 13 February 2009
N Manoim Date
D Lewis and Y Carrim concurring.
Tribunal Researcher: I Selaledi
For the merging parties: Edward Nathan Sonnenbergs Inc
For the Commission: K Mahlakoana
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