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COMPETITION TRIBUNAL
REPUBLIC OF SOUTH AFRICA
Case No.: LM177Mar25
In the matter between:
Old Mutual Corporate Ventures (Pty) Ltd Primary Acquiring Firm
and
Fairheads Benefit Services (Pty) Ltd and
Fairheads Financial Services (Pty) Ltd Primary Target Firms
Panel : AW Wessels (Presiding Member)
: A Ndoni (Tribunal Member)
: I Valodia (Tribunal Member)
Heard on : 8 May 2025
Order issued on : 8 May 2025
Reasons issued on : 27 May 2025
REASONS FOR DECISION
Approval
[1] On 8 May 2025, the Competition Tribunal (“Tribunal”) unconditionally
approved a large merger transaction in terms of which Old Mutual Corporate
Ventures (Pty) Ltd (“OMCV”) intends to acquire a 30% shareholding in Fairheads
Benefit Services (Pty) Ltd (“FBS”) and Fairheads Financial Services (Pty) Ltd
(“FFS”), respectively (“the Target Firms”).
[2] Post-merger, OMCV and Vunani Capital (Pty) Ltd (“Vunani”) will jointly
control the Target Firms.
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[3] The primary acquiring firm, OMCV, is ultimately owned by Old Mutual
Limited (“OML”), a Johannesburg Stock Exchange-listed company that is not
controlled by any shareholder. OML, its controlling firms and its subsidiaries (the
“Acquiring Group”), specialise in providing financial services. Relevant to the
competition assessment of this transaction are their provision of pension, provident
and retirement annuity fund services. We note that the Acquiring Group administers
beneficiary and unclaimed benefit funds only from its retirement products, and it
outsources some of this administration to the Target Firms.
[4] The Target Firms are each 100% controlled by Vunani. Vunani is 100%
controlled by Vunani Limited. The Target Firms operate nationally in the financial
services sector. FBS administers beneficiary and unclaimed benefit funds, while FFS
provides the services to locate and contact beneficiaries of beneficiary funds and
unclaimed benefit funds (“Fund Administration Services”) to FBS.
[5] The Competition Commission (“Commission”) found no horizontal overlap
between the activities of the merging parties since the Acquiring Group does not
provide any Fund Administration Services in competition with the Target Firms.
[6] The Commission found that the proposed transaction results in a vertical
overlap, given that beneficiary and/or unclaimed benefit funds emanating from the
Acquiring Group’s retirement, pension and provident fund financial services may
require the Target Firm’s Fund Administration Services.
Input foreclosure
[7] The Commission assessed whether the merger would raise input foreclosure
concerns if the merged entity ceased to provide Fund Administration Services to the
Acquiring Group’s competitors. The Commission contacted the Acquiring Group’s
competitors, such as ABSA, Momentum and Liberty, who indicated that there are
several credible alternatives to the Target Firms, such as Fedgroup, Alexandra
several credible alternatives to the Target Firms, such as Fedgroup, Alexandra
Forbes, Sanlam Trust, ICTS Tracing Services, The Data Factory, Trace Genie
UBMV Gateway Benefit Tracing, ICTS, Trace Genie, Tracker Tracing and Teba
Tracing.
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Customer foreclosure
[8] The Commission also assessed whether the merger would raise customer
foreclosure concerns. The Commission found that other than the Target Firms, the
Acquiring Group does not procure and Fund Administration Services from any third
parties (i.e. competitors of the Target Firms).
[9] Given the above, the proposed transaction is unlikely to lead to a substantial
prevention or lessening of competition in any relevant market.
[10] The merging parties have confirmed that the transaction will not result in any
job losses.
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[11] OML has 43.53% Historically Disadvantaged Persons (“HDP”) ownership.
Vunani has 68.71% HDP ownership. Pre- merger, the Target Firms thus each have
68.71% ownership by HDPs. Post-merger, the Target Firms will remain majority HDP
controlled as Vunani will retain 70% of the shareholding in each of the Target Firms.
[12] Given the above, the proposed transaction does not raise any public interest
issues.
[13] In the circumstances, we unconditionally approve the proposed transaction.
27 May 2025
Mr Andreas Wessels Date
Ms Andiswa Ndoni and Prof Imraan Valodia concurring.
Tribunal Case Manager: Moleboheng Mhlati
For the Merger Parties: Roxanne Ker of Walkers Inc.
For the Commission Tumiso Loate and Wiri Gumbie
1 See paragraph 1.5, page 50 of the Record.