NON-CONFIDENTIAL
competition trlbunal
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COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: LM218Feb17
In the matter between:
SANLAM LIFE INSURANCE LIMITED Acquiring Firm
and
BRIGHTROCK HOLDINGS (PTY) LTD Target Firms
LOMBARD LIFE LIMITED
Panel
Heard on
Order Issued on
Reasons Issued on
Approval
: AW Wessels (Presiding Member)
: Andiswa Ndoni (Tribunal Member)
: Medi Mokuena (Tribunal Member
: 12 April 2017
: 12 April 2017
: 24 April 2017
Reasons for Decision
[1] On 12 April 2017, the Competition Tribunal ("Tribunal") approved the proposed
transaction involving Sanlam Life Insurance Limited ("Sanlam Life") and
BrightRock Holdings (Pty) Ltd ("BrightRock Holdings") and Lombard Life
Limited ("Lombard Life").
[2] The reasons for approving the proposed transaction follow.
Parties to the proposed transaction
Primary acquiring firm
[3] The primary acquiring firm is Sanlam Life, a firm incorporated in accordance
with the laws of the Republic of South Africa. It is wholly-controlled by Sanlam
Limited ("Sanlam"), a public company listed on the Johannesburg Securities
Exchange Limited and Namibian Stock Exchange. Sanlam is not controlled by
any single firm. Sanlam controls a vast number of firms.
[4] The Sanlam group is a financial services group. Relevant to the competition
assessment of the proposed transaction are Sanlam's activities in the provision
of long-term life insurance.
Primary target firms
[5] The primary target firms are (i} BrightRock Holdings; and (ii) Lombard Life. Both
these firms are incorporated in accordance with the laws of the Republic of
South Africa.
[6] BrightRock Holdings is not directly or indirectly controlled by any single firm. It
directly controls BrightRock (Pty) Ltd ('IBrightRock"). Lombard Life is a wholly
owned subsidiary of . - is not directly or
indirectly controlled by any single firm. - has a 1111 shareholding in
BrightRock Holdings.
[7] BrightRock is an exclusive insurance underwriting manager for Lombard Life as
it performs binder functions and other services on behalf of Lombard Life.
[8] Lombard Life is a licensed Jong-term insurer. It offers individualised life
insurance products built around clients' needs, i.e. the products are flexible in
that they change when clients' needs change.
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Proposed transaction and rationale
[9] The proposed transaction comprises of two steps which are considered to be
interdependent and forming part of a single indivisible transaction. In step one,
BrightRock Holdings intends to acquire the entire issued share capital in
Lombard Life. In step two, Sanlam Life intends to acquire 53% of the issued
share capital of BrightRock Holdings.
[1 O] According to the merging parties, the proposed transaction will inter alia enable
Sanlam to offer innovative needs-matched long-term insurance products.
Impact on competition
[11] The Competition Commission ("Commission"") found that the merging parties'
activities overlap horizontally in the provision of long-term individual insurance
policies, including assistance policies, disability policies and life policies.
These were analysed as three separate relevant product markets in a national
geographic market.
[12] The Commission found that the merging parties will have combined national
market shares of less than 20% in each of the three abovementioned relevant
product markets, i.e. the provision of long-term assistance, disability and life
policies. It furthermore found that the merging parties will be constrained by
alternative service providers such as Old Mutual, Discovery Life, Liberty and
the MMI Group, amongst others. Based on this, the Commission found that
the proposed transaction is unlikely to substantially prevent or lessen
competition in any relevant market.
[13] The merging parties further at the hearing indicated that their combined
national market share will be below 20% in the market for the provision of (all
categories of) long-term individual insurance policies.1
1 Transcript, page 4.
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[14] We conclude that the proposed transaction is unlikely to substantially prevent
or lessen competition in any (potential) relevant market.
Public interest
[15] The merging parties confirmed that the proposed transaction will have no
negative impact on employment.2
[16] No other public interest concerns arise from the proposed transaction.
Conclusion
[17] In light of the above, we conclude that the proposed transaction is unlikely to
substantially prevent or lessen competition in any relevant market. In addition,
no public interest issues arise from the proposed transaction. Accordingly, we
approve the proposed transaction unconditionally.
Mr AW Wessels
Ms Andiswa Ndoni and Ms Medi Mokuena concurring
Tribunal Case Manager:
For the merging parties:
For the Commission:
2
Merger Record, pages 11 and 66.
Hayley Lyle
Lizel Blignaut of ENS Africa
Zanele Hadebe
24 April 2017
DATE
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