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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