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[2014] ZACT 56
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Liberty Holdings Ltd v Liberty Health Holdings Pty Ltd (019158) [2014] ZACT 56 (27 August 2014)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: 019158
In
the matter between:
LIBERTY
HOLDINGS
LIMITED
Primary Acquiring Firm
And
LIBERTY
HEALTH HOLDINGS
PROPRIETARY
LIMITED
Primary Target Firm
Panel
Dr Takalani Madima (Presiding Member)
Anton
Roskam (Tribunal Member)
Prof
Fiona Tregenna (Tribunal Member)
Heard
on
30 July 2014
Order
Issued on
30 July 2014
Reasons
Issued on
27 August 2014
Reasons
for Decision
Approval
[1]
On 30 July 2014, the Competition
Tribunal unconditionally approved the merger between Liberty Holdings
Ltd and Liberty Health Holdings
(Pty) Ltd.
[2]
The reasons for approving the
proposed transaction follow.
Parties
to transaction
Primary
acquiring firm
[3]
The primary acquiring firm is
Liberty Holdings Ltd (“Liberty”) which is a public
company listed on the Johannesburg
Stock Exchange Limited (“JSE”)
with its largest shareholder being the Standard Bank Group Limited.
Liberty controls
Liberty Health Holdings, Eq-Fin (Pty) Ltd and STAN
LIB Ltd, amongst others.
Primary
target firm
[4]
The primary target firm is Liberty
Health Holdings (Pty) Ltd (“Liberty Health”) which is
jointly controlled by Liberty
(74.9%) and the NHA Trust (“NHA”)
(25.1%). Liberty Health controls the following firms:
•
Unique
Payment Services (Pty) Ltd;
•
Neil
Harvey and Associates (Pty) Ltd;
•
Vinnovations
(Pty) Ltd;
•
Vmed
Administrators (Pty) Ltd;
•
Vmedical
Solutions (Pty) Ltd;
•
Guard
Risk Cell Captive;
•
Main
Street (Pty) Ltd;
•
Liberty
Blue Consultancy Limitada.
Proposed
Transaction and Rationale
[5]
In terms of the Sale Agreement,
NHA undertakes to sell its 25.f% shareholding in Liberty Health to
Liberty. This will result in
a change from joint to sole control over
Liberty Health.
[6]
Liberty submits, as a rationale
for the transaction, that optimisation and synergies can be better
achieved in relation to various
aspects of shared services if Liberty
Health is a wholly owned subsidiary of Liberty.
Relevant
Market and Impact on Competition
[7]
Liberty is the holding company of
various operating subsidiaries engaged in the provision of financial
services outside of traditional
banking services. Liberty’s
product and service offerings include long term insurance products,
asset management, property
administration and development through its
subsidiary Liberty Health, health administration and managed care
services. Standard
Bank primarily conducts personal and business
banking, corporate and investment banking and certain personal and
business insurance
services.
[8]
Liberty Health’s business
primariiy comprises the provision of medicalscheme administration
services (“Administration
Services”). The other services
offered by Liberty Health are managed heaithcare services and
information technology services
(“IT”) in relation to the
licensing of medical schemes administration software and related IT
services.
[9]
An assessment of the merging
parties
1
activities found that there is no horizontal overlap in the
activities of the merging parties as Liberty does not provide medical
scheme services, medical scheme administration services or managed
healthcare services. It was further considered whether Liberties
incentives would change post-merger as a result of the move from
joint to sole control. It is found that even though NHA had joint
control, which it held due to the minority protection rights it was
afforded, it did not exercise control over key management and
strategic decisions. Thus the exit of NHA does not afford Liberty any
new management control rights as regards to operational or
market-specific conduct.
[10]
There Is further no vertical relationship between Liberty and Liberty
Health or between Liberty and any of Liberty Health’s
customers. Therefore there is unlikely to be any incentive for
Liberty to foreclose.
Conclusion
[11]
In light of the above I conclude
that the proposed transaction is unlikely to substantially prevent or
lessen competition in any
of the markets in which the parties compete
in. In addition, no public interest issues arise from the proposed
transactions. Accordingly
we approve the proposed transaction
unconditionally.
27
August 2014
DATE
Dr
Takalani
Madima
Anton
Roskam and Prof Fiona Tregenna concurring
Tribunal
Researcher: Derrick Bowles
For
the merging parties: Paul Cieland - Werksmans Attorneys
For
the Commission: Glementine Mahlangu and Seema Nunkoo