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Date of release: 15 January 2020
Tribunal approves RCS credit lender’s acquisition of Edcon book debt 
 
The Tribunal has approved two large merger transactions through which RCS Cards (Pty) Ltd – an unsecured credit lending provider – will acquire a portion of Edcon Limited’s book debt owned by Edcon (first transaction) and book debt owned by ABSA Bank Limited (second transaction).
 
Edcon CEO, Grant Pattison, submitted to the Tribunal that Edcon customers/card holders will not be impacted by the transactions and that the terms and conditions of their accounts will not be changed. RCS will honour the terms and conditions: “This transaction is about how the credit machinery works in the background,” he said during the hearing.
 
RCS – the acquiring firm
 
RCS Cards is incorporated in South Africa and is ultimately controlled by BNP Paribus Société Anonyme. RCS does not control any firm in South Africa.
 
The RCS Group provides consumer finance services, focusing on unsecured credit including retail credit card facilities and insurance products in South Africa. The RCS Group is structured into two main business lines, these being transaction finance (card products) and fixed term finance (loans).
 
The first transaction
 
RCS will acquire the Edcon Book Debt from Edcon. Edcon’s Book Debt refers to all claims and entitlements for the use of an Edcon branded store card by individuals who qualify for and have been issued a with an Edcon store card; or claims recorded in the revolving credit facility agreements concluded between Edcon and the principal debtor. 
 
Post transaction, RCS will wholly own and control the Edcon Book Debt.
 
The second transaction
 
RCS will also acquire Edcon Limited’s cardholders book debt owned by ABSA Bank Ltd (ABSA). Post-transaction, RCS will own and control the ABSA Book Debt.
 
The ABSA Book Debt refers to all claims and entitlements for the use of an Edcon branded store card by individuals who qualify for and have been issued a with an Edcon store card or claims recorded in the revolving credit facility agreements concluded between Edcon and the principal debtor. The ABSA Book Debt comprises active Edcon store card accounts and gross receivables.
 
Views of third parties
 
The Competition Commission contacted various competitors and retailers who did not raise any concerns regarding the proposed transaction, save for one competing retailer who had asked for their identity to remain confidential.
 
The retailer was concerned that post-merger, RCS would become the largest store credit provider in South Africa and a dominant player in the store card credit market. It believed as a result of such dominance, RCS would be able to offer customer incentives and effectively gain a monopoly in the store credit card market.
 
The Commission, in its assessment, found that the concerns were without merit and concluded that the proposed transactions would not result in a substantial lessening or prevention of competition.
Gillian de Gouveia
Communications Officer
Tel: +27 (0) 12 394 1383
Cell: +27 (0) 82 410 1195
E-Mail: GillianD@comptrib.co.za
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