The Competition Tribunal has set yet to be specified transformation conditions to approve the mega asset management deal between Sanlam Investment Management (SIM) and the country’s largest money manager Ninety One.
The tribunal said on Tuesday it had approved the merger subject to a range of conditions designed to “safeguard competition, protect employees and promote transformation,” — conditions that have become the norm in large mergers in SA.
“Among others, these involve confidentiality and information-sharing protocols, business separation measures, a moratorium on merger-related retrenchments, support for transformation initiatives aimed at facilitating the participation of small and HDP [historically disadvantaged persons]-owned asset management firms and stockbrokers, and enterprise and supplier development commitments,” the tribunal said.
The tribunal did not release the full reasons for approving the merger with the conditions, these might be made public later. However, the approval of the deal by the Competition Commission last month shows the merging parties tendered the transformation aspect of the deal.
“To address public interest concerns, the merging parties have tendered employment conditions and other public interest commitments aimed at facilitating the participation of small and HDP-owned asset management firms and stockbrokers,” the commission said in August.
“The merging parties have committed that Glacier will continue to offer an “open architecture” platform, providing third-party asset managers access to its platform in accordance with Glacier's due diligence processes, which shall not be unfair, unreasonable or discriminatory,” the commission said.
The transaction, first announced in November 2024, will see Ninety One add about R400bn in new assets under management.
Authorities in the UK, where SIM has assets, have already approved the deal, with about £1.9bn of SIM’s active asset management business having been transferred to Ninety One UK.
The transfer helped Ninety One’s assets under management’s surge £11.1bn to £139.7bn at the end of June.
The tribunal’s approval of the deal means the transfer of SIM’s assets to Ninety One is closer to completion. After implementation, SIM will become a wholly owned subsidiary of Ninety One.
Ninety One, which shed its Investec Asset Management identity five years ago, will become Sanlam’s primary active investment manager, gaining access to an extensive retail distribution network.
In addition, Sanlam will appoint Ninety One as the permanent investment manager to manage assets for Sanlam Investments UK, a wholly owned unit of the Sanlam Group. Sanlam will serve as an anchor investor in Ninety One’s international private and specialist credit strategies that meet its investment requirements.
As consideration for the transaction, the Sanlam Group receives an equity stake of about 12.3% in Ninety One through a combination of Ninety One Ltd and Ninety One Plc shares establishing the Sanlam Group as a long-term shareholder of Ninety One.
Reflecting on SA’s broader competition regime, experts from corporate law firm Bowmans said a defining feature of SA’s Competition Act is the commitment to public interest.
The experts said transformation, inclusion and SME participation are not merely policy preferences, but are constitutional and developmental imperatives that are embodied in the legislation and part of the policy of the commission’s core mandate.
“This means that we are still likely to see some mergers in SA being approved subject to public interest conditions, such as the formation of employee share ownership plans as well as enterprise and supplier development funds,” Heather Irvine and Nazeera Mia said in a note.
“However, a more nuanced assessment of public interest considerations in mergers is developing, as the country prioritises growth and job creation. Merger remedies are becoming more sophisticated and data-driven, especially in sectors in which competition and public interest issues intersect.”
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