M and G FA And Prudential Portfolio Managers

The judgment

The court's own file

COMPETITION TRIBUNAL OF SOUTH AFRICA Case No.: LM006Apr21 In the matter between: M&G FA Limited Primary Acquiring Firm And Prudential Portfolio Managers (South Africa) (Pty) Ltd Primary Target Firm E Daniels (Presiding Member) Y Carrim (Tribunal Panel Member) Panel: A Ndoni (Tribunal Panel Member) Heard on: 25 May 2021 Order Issued on:25 May 2021 Reasons Issued on:25 May 2021 ORDER Further to the recommendation of the Competition Commission in terms of section 14A(1)(b) of the Competition Act, 1998 (“the Act”) the Competition Tribunal orders that– 1.the merger between the abovementioned parties be approved in terms of section 16(2)(a) of the Act; and 2.a Merger Clearance Certificate be issued in terms of Competition Tribunal Rule 35(5)(a). 25 May 2021 Presiding Member Mr Enver Daniels Date Concurring: Ms Yasmin Carrim and Ms Andiswa Ndoni Date: 25 May 2021 To : Fasken Attorneys Case Number: LM006Apr21 M and G FA Ltd And Prudential Portfolio Managers (South Africa) (Pty) Ltd You applied to the Competition Commission on 31 March 2021 for merger approval in accordance with Chapter 3 of the Competition Act. Your merger was referred to the Competition Tribunal in terms of section 14A of the Act, or was the subject of a Request for consideration by the Tribunal in terms of section 16(1) of the Act. After reviewing all relevant information, and the recommendation or decision of the Competition Commission, the Competition Tribunal approves the merger in terms of section 16(2) of the Act, for the reasons set out in the Reasons for Decision. This approval is subject to: xno conditions. the conditions listed on the attached sheet. The Competition Tribunal has the authority in terms of section 16(3) of the Competition Act to revoke this approval if a)it was granted on the basis of incorrect information for which a party to the merger was responsible. b)the approval was obtained by deceit. c) a firm concerned has breached an obligation attached to this approval. The Registrar, Competition Tribunal Notice CT 10 About this Notice This form is prescribed by the Minister of Trade and Industry in terms of section 27 (2) of the Competition Act 1998 (Act No. 89 of 1998). Contacting the Tribunal The Competition Tribunal Private Bag X24 Sunnyside Pretoria 0132 Republic of South Africa tel: 27 12 394 3300 fax: 27 12 394 0169 e-mail: ctsa@comptrib.co.za Merger Clearance Certificate This notice is issued in terms of section 16 of the Competition Act. You may appeal against this decision to the Competition Appeal Court within 20 business days. 1 COMPETITION TRIBUNAL OF SOUTH AFRICA Case no: LM006Apr21 M&G FA Limited (Primary Acquiring Firm) and Prudential Portfolio Managers (South Africa) (Pty) Ltd (Primary Target Firm) Heard on: 25 May 2021 Order Issued on: 25 May 2021 REASONS FOR DECISION [1]On 25 May 2021, the Competition Tribunal unconditionally approved a large merger between M&G FA Limited (“M&G”) and Prudential Portfolio Managers (South Africa) (Pty) Ltd (“PPMSA”). [2]M&G is acquiring 0.13% of the shares in PPMSA from Thesele Asset Management No 2 (RF) (Pty) Ltd, such that M&G will increase its shareholding from 49.99% to 50.12% in PPMSA, therefore crossing the bright lines, indicating control under the Act. [3]M&G is owned by M&G plc and is a shareholder in PPMSA. The shares in PPMSA are held by M&G, Prudential Staff Investment Company (RF) (Pty) Ltd, Thesele Asset Management (RF) (Pty) Ltd (“TAM 1”) and Thesele Asset Management No.2 (RF) (Pty) Ltd (“TAM 2”). [4]M&G is a leading international savings and investment business, responsible for the management of individual and institutional investments, and PPMSA is an investment/asset manager on behalf of retail and institutional investors in South Africa. [5]In its competition assessment, the only overlap that was found by the Competition Commission (“Commission”) relates to the fact that M&G holds 49.99% shareholding in PPMSA. In assessing the market shares, the Commission found that post-merger, the merged entity will have less than 3% market share, with no market share accretion. Additionally, the merged entity will still be constrained by larger players such as Old Mutual Investment Group, Stanlib, Sanlam Investments and Coronation, among others. [6]The Commission is therefore of the view that the proposed merger is unlikely to substantially prevent or lessen competition. [7]The merger raises no public interest concerns. [8]No third parties raised any concerns. 2 [9]We concluded that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market, or to have a negative impact on public interest. 25 May 2021 Mr Enver Daniels Date Ms Yasmin Carrim and Ms Andiswa Ndoni concurring. Tribunal Case Manager: Camilla Mathonsi For the Merging Parties: Stuart Strachan For the Commission: Zintle Siyo and Mogau Aphane