Momentum, the health insurance arm of listed financial services group FirstRand, has appealed to the Competition Appeal Court regarding the Competition Tribunal’s decision to impose a condition on the merger between Momentum and African Life Health, the tribunal confirmed on Monday.
Momentum had agreed to acquire African Life Health from listed insurer African Life, as part of a wider deal in which Aflife was being bought out by rival insurer Sanlam. The merger between Momentum and African Life Health was conditionally approved by the Competition Tribunal in December, saying that any persons who were directors of both Momentum and Discovery, the health insurance arm of FirstRand, would have to resign from one of the boards.
Directors affected by the ruling are Laurie Dippenaar and Johan Burger, both of whom sit on the board of FirstRand, as well as the boards of Discovery and Momentum.
The tribunal imposed the condition because it was concerned that the companies operating within the FirstRand group — Discovery Health, Momentum and African Life Health — would control an estimated 34,6% of South Africa’s medical scheme administration market. At the time, the tribunal said that ”post merger there would be an enhanced incentive to co-ordination rather than rivalry”.
On Monday the tribunal said Momentum had made two applications to the Competition Appeal Court with regard to the condition. The first was an urgent
interim relief to suspend the condition, and the second was a review and appeal
of the tribunal’s decision on the condition.
The date for the review and appeal has not yet been set down, the tribunal added, but the interim relief would be heard by the Cape High Court on Tuesday. – I-Net Bridge