This morning (Thursday 14 October), the Competition Tribunal approved the proposed merger of Metropolitan and Momentum to form MMI Holdings, subject to certain employment-related conditions. MMI Holdings will be the third largest listed life assurer in South Africa.
The tribunal has stipulated that no retrenchments resulting from the merger are to be allowed in South Africa within a period of two years from the effective date of the proposed transaction, except at senior management level.
According to Nicolaas Kruger, the group CEO designate of MMI Holdings, such additional employment-related conditions are not unexpected. The conditions are, however, more rigid than anticipated.
“While we wait for the Competition Tribunal to give the reasons for their decision, which will provide us with a clearer indication of the way forward, we are considering the alternatives open to us, amongst which are accepting the decision or lodging an appeal,“ says Kruger. “In the meantime, both the merging parties will be consulting with their respective sets of advisers as well as referring the matter to their boards of directors.”
Regarding the regulatory approval process, Wilhelm van Zyl, deputy group CEO designate, points out that the Financial Services Board (FSB) still has to give its go-ahead as part of concluding that process.
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