By Roy Cokayne

Pretoria - The Competition Tribunal yesterday unconditionally approved the merger between long-term insurers Liberty Group and Investec Employee Benefits (IEB).

The transaction was a horizontal merger, with an overlap occurring in the provision of long-term insurance products in the form of investment, risk underwriting and administration services for retirement funds.

The Competition Commission previously recommended approval of the merger to the tribunal on the grounds that the market share of the merged group in the long-term retirement fund insurance market was small, at slightly above 15 percent.

The commission said the merged entity would also face competition from many large players active in the long-term retirement fund insurance market, including Old Mutual, Sanlam, Momentum, Sage, Metropolitan, Discovery and independent brokers.

The transaction was unlikely to give rise to a substantial lessening or prevention of competition, the commission said.

In the proposed transaction, Liberty and IEB would enter into a transfer agreement in terms of which Liberty would acquire the business of marketing, underwriting and administering certain insurance policies issued by IEB.

Liberty would acquire IEB's rights and obligations in the policies being transferred but to minimise risks, market disruptions and other adverse conditions, they agreed to enter into a reinsurance agreement and an administrative agreement.