Old Mutual restructuring gets nod from Ebrahim Patel
The minister’s seal of approval comes on the eve of the Competition Tribunal’s decision
Economic Development Minister Ebrahim Patel has welcomed Old Mutual’s decision to make SA the primary base for all of its emerging market activities — a move that comes with a commitment to public interest undertakings, including a R500m development fund.
Patel made his comments on Tuesday, a day before the Competition Tribunal considers the Competition Commission’s recommendation to approve Old Mutual Ltd’s takeover of control of Old Mutual plc.
If it gets the tribunal’s go-ahead on Wednesday, the transaction will be presented to shareholders for approval.
Old Mutual Ltd was established to facilitate the internal reorganisation and managed separation of the Old Mutual Group.
The Competition Commission assessed the internal restructuring of the firms within the Old Mutual group and concluded the transaction was unlikely to substantially prevent or lessen competition in any market in SA.
The Department of Economic Development filed a notice of intention to participate in the transaction. It has subsequently agreed with the merging parties on a list of commitments to be undertaken by the group as part of the restructuring.
The Competition Commission did not oppose the imposition of these commitments as conditions to the approval of the transaction.
Patel said the move "back home" of one of SA’s premier financial institutions would help to inject investor confidence in the economy, and was "a well-timed signal that we can grow the economy in the period ahead and unlock the country’s potential of job creation and economic inclusion".
The public interest commitments by Old Mutual, made in terms of the Competition Act, include undertakings not to retrench any workers as a result of the transaction and to ensure that the company achieves best-of-class empowerment status within a prescribed time.
It also includes the decision to establish a R500m fund to drive the growth of small business and employment.
"We look forward to the new jobs that will be created in the South African economy, particularly within small businesses, by the development fund," Patel said.