TRIBUNAL APPROVES DOTSURE, HOLLARD TRANSACTION WITH CONDITIONS RELATING TO EMPLOYMENT AND GREATER SPREAD OF OWNERSHIP
The Tribunal has confirmed the large merger, with public interest-related conditions, whereby Badger Holdings (Pty) Ltd (“Badger”) through its wholly owned subsidiary, Dotsure Limited (“Dotsure”), will acquire the direct personal lines insurance business (“the target business”) currently underwritten by The Hollard Insurance Company Limited, a subsidiary of Hollard Holdings (Pty) Ltd (“Hollard”).
The target business comprises Hollard’s direct, personal lines insurance book comprising short-term (non-life) personal line insurance and certain long-term (life) insurance. Badger is also a target firm because as a direct result of this transaction, Hollard will also acquire shareholding and joint control in Badger.
MERGER CONDITIONS
Employment
The merger parties will not retrench or relocate to George in the Western Cape (unless the employee chooses otherwise), any employees in South Africa as a result of the merger for a period of 24 months from the merger’s implementation date.
Should the need arise to retrench employees after the 24-month period, the merger parties will, for an additional 24-month period, give preference to any affected employees in relation to any vacancies within Badger and Hollard Groups’ wholly owned subsidiaries or divisions, provided they have the required qualifications, skills and experience.
Relocation of employees
Post-merger, the target business will be integrated into the Badger Group and relocated to George, as the Badger Group operates its business primarily from George. This will result in some employees of the target business being relocated from Johannesburg to George. The merger parties will pay relocation costs in relation to this move.
In exceptional circumstances, the merger parties will also consider the provision of travel assistance or permit work-from-home arrangements for those employees that may need to work from the Springs, Gauteng office during the 24 months, post-merger.
To the extent that it is reasonably practical and commercially viable, the merger parties undertake to provide voluntary severance packages (“VSPs”) to affected employees who are unable to relocate after the 24 month period. The merger parties will, subject to compliance with the Labour Relations Act, offer VSPs to the affected employees before making a final decision on the employees to be retrenched.
Employee share scheme
This condition obligates the merger parties to consider setting up an employee share scheme, within 5 (five) years after the merger’s implementation date, that will give workers an opportunity to benefit and participate in the ultimate ownership of the merged entity.
Background
Dotsure, previously known as Oakhurst Insurance Company Limited, is wholly owned by Badger. It is a licensed short-term (non-life) insurer and is an authorised financial services provider. Badger is controlled by Badger International (Pty) Ltd. The Badger Group is an insurance provider in South Africa.
The Hollard Group (i.e., Hollard and all firms which it directly and indirectly controls) is also an insurance provider. In addition, it provides a range of investment products to a diverse customer base.
The target business provides short-term (non-life) personal line insurance as well as long-term (life) insurance.
Issued by:
Gillian de Gouveia, Communications Officer
On behalf of the Competition Tribunal of South Africa
Cell: +27 (0) 82 410 1195
E-Mail: GillianD@comptrib.co.za
Twitter: @comptrib
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