It is reported that the Competition Commission has approved the merger of Patrice Motsepe’s Africa Rainbow Capital (ARC) subsidiary, NewCo, and the Commonwealth Bank of South Africa (CBSA) – which owns TymeDigital.
The opportunity for Motsepe’s ARC to pick up a majority business in the digital banking came to light when Commonwealth Bank of Australia (CBA) decided to review its operations in the country with the intention of exiting.
BusinessTech reports the Competition Commission has now recommended the deal to be approved without conditions, paving the way for a digital bank set to be launched before the end of the year.
Tyme and CBSA currently provide a limited range of banking services, such as money transfer, TYME Coach and Merchant Advance in South Africa.
The commission states that Tyme intends to expand its product offering through services such as personal accounts, goal-saving, unsecured loans, credit cards and TYME Connect.
The publication says ARC may consider introducing new shareholders in the current structure, which may include management.
The acquisition comprises TymeDigital in South Africa and the related intellectual property and patents.
Both CBSA and Tyme currently have a banking licence issued by the South African Reserve Bank (SARB), which allows them to operate a bank.
“The commission found that the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in the relevant markets.”
“Further, the commission found that the proposed transaction does not raise any employment or other public interest concerns,” it was quoted as saying.
Although it has been approved by the commission, this acquisition is still subject to approval by the Prudential Authority of the SARB.