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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

Panel:

E Daniels (Presiding Member)

Y Carrim (Tribunal Panel Member) 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).

Presiding Member Mr Enver Daniels                                  Date: 25 May 2021

 Concurring: Ms Yasmin Carrim and Ms Andiswa Ndoni

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.

[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.

Mr Enver Daniels                                                                                           Date: 25 May 2021

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

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