Small company allowed to participate in Hollard mergers hearings
FOR IMMEDIATE RELEASE
6 DECEMBER 2016
Claims company allowed to intervene in short-term and long-term firms merger on public interest grounds
The Competition Tribunal has granted short term insurance claim distributor Collision and Management Centre(“CMC”), who presently has an agreement with Regent, conditional leave to intervene in a merger hearing of Hollard and the Regent Group, and Hollard and MotoVantage.
CMC had requested permission to intervene because it is concerned that post-merger its sole and exclusive agreement with Regent might be terminated, driving the applicant out of business and resulting in the job losses of 28 employees. The agreement, entered into in 2008, makes CMC the sole administrator of any claims and losses arising from Regent’s customers.
The Tribunal this week said CMC could intervene in public interest matters, only in relation to the likely impact of the mergers in relation to 12 (A)(3) of the Competition Act which says approval of a merger has to take into consideration: the impact on a region; employment; the ability of small businesses and historically disadvantaged persons to become competitive and the ability of national industries to compete in international markets.
In terms of public interest matters the CMC is entitled to: attend pre-hearing conferences; provide oral and documentary evidence during the proceedings; cross-examine witnesses led by the Competition Commission and the merger parties and present argument during the proceedings.
The merger was prohibited by the Competition Commission and the Commission have brought the matter to the Tribunal for adjudication.
The proposed merger involves two steps. The first is the acquisition by Hollard Holdings (Pty) Ltd of Regent Insurance Company Ltd (Regent Insurance) and Regent Life Assurance Company Limited. Hollard provides short-term and long-term motor insurance, transportation and property insurance, as well as individual life policies.
The Regent Group offers short-term and long-term insurance policies and insurance and non-insurance value-added products.
The second step of the proposed transaction entails a merger of MotoVantage Holdings (MotoVantage), formed through a partnership between FirstRand Group and The Hollard Insurance Company, with SA Warrantees (Pty) Ltd; Motor Compliance Solutions (Pty) Ltd, Paintech Maintence (Pty) Ltd and Anvil Premium Finance from Imperial. MotoVantage markets, distributes and administers policies underwritten by licensed insurers.
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