The Competition Tribunal will hear two proposed large mergers next Wednesday.
The first involves Kagiso Financial Services acquiring Infrastructure Finance Corporation (IFC). Kagiso offers project finance advisory services, structured finance, debt advisory and financial engineering solutions to its project finance clients. IFC provides funding or infrastructure financing to the public sector.
Although there is no product overlap the Competition Commission examined a potential vertical relationship between Kagiso and IFC (Kagiso may act as an adviser to a transaction that IFC may fund) but found that this does not create a competition problem.
The Competition Commission is of the view that the transaction would not substantially prevent or lessen competition nor does it give rise to significant public interest concerns. The commission has referred the matter to the Competition Tribunal.
The second case involves a merger between two United States companies with operations in South Africa. The proposed transaction involves JP Morgan Chase & Co, a public company listed on the New York Stock Exchange, acquiring Bank One Corporation, a company incorporated under US laws.
The transaction constitutes a stock-for-stock merger in terms of which Bank One will be merged into JP Morgan Chase & Co. The merged entity will be known as JP Morgan Chase & Co and will continue to trade on the New York Stock Exchange with corporate headquarters located in New York. Bank One’s separate existence as a corporation will terminate.
The transaction is subject to the approval of several competition authorities worldwide. The Competition Commission, after an investigation, is of the view that the transaction would not substantially prevent or lessen competition as there is no overlap in the activities of the merging firms in South Africa. Further, the Commission says there are no public interest concerns.
It has referred the matter to the Competition Tribunal. — I-Net Bridge