On 20 September 2012 the Competition Tribunal (Tribunal)
approved the takeover by ABSA Bank (ABSA) of Edcon Group's
credit and financial services business on condition that the
parties establish safeguards against sharing information with
Woolworths Financial Services.
ABSA presently has a 51 per cent shareholding in Woolworths
Financial Services, the financial services business of Woolworths.
The proposed takeover of Edcon's private label store card
portfolio will result in ABSA having a shareholding in two
competing companies, namely Edcon and Woolworths.
The Competition Commission (Commission) was concerned that the two
competitors could exchange competitively sensitive information
through ABSA. The parties have addressed the Commission's
concerns by making provision for Chinese walls within ABSA in the
form of separate management structures, with different personnel
assigned to the creditors' books and separate reporting
lines. There will furthermore be no joint management of the
creditor books and strict ring fencing of the two businesses.
The Tribunal approved the merger subject to these
conditions.
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