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According to the commission, open medical scheme Fedhealth has moved to acquire another open scheme, Medshield.
Fedhealth offers 15 medical aid plans consisting of eight benefit options and seven efficiency discount options.
Medshield, meanwhile, offers 10 medical aid plans, comprising eight benefit options and two efficiency discount options.
Both schemes are are non-profits registered in terms of section 24(1) of the Medical Schemes Act, regulated by the Council for Medica Schemes.
They are not controlled by any firms, nor do they control any firms themselves. Neither have made public announcements about the proposed acquisition.
However, Fedhealth most recently became Sanlam’s official and exclusive strategic health partner after the insurer parted ways with Bonitas, paving the way for a new direction for the scheme.
Sanlam’s Group CEO, Paul Hanratty, said February that the partnership aims to facilitate more accessible healthcare in the country, leveraging Fedhealth’s customisable plans and schemes.
Fedhealth, meanwhile, said the move supports its ambitions to expand its market share in the corporate space.
“The influx of corporate members will further boost our sustainability, allowing for continued innovation and member-focused offerings,” it said at the time.
Under the new partnership, Fedhealth has been promising a “reboot” and the launch of a new medical scheme from 1 October 2025.
The new scheme will still operate as an independent entity, run by a board of trustees consisting of scheme members.
“By partnering with Sanlam, we’ll now be able to offer even more money-saving opportunities by means of integrated product offerings, an innovative rewards platform and wellness incentives to our members that encourage them to take further charge of their health,” the scheme said.
Notably, Medshield—the target of the acquisition—is operated by Medscheme, a third-party medical scheme administrator that manages several schemes in South Africa.
Medscheme has its own ties to Sanlam, being owned by AfroCentric Investment Corporation, a black-owned investment holding company.
In May 2023, Sanlam acquired a 60% controlling stake in AfroCentric. Medscheme is ultimately part of the AfroCentric group, which is majority-owned by Sanlam.
According to the latest data available on member ship numbers Medshield has around 140,000 beneficiaries, and Fedhealth as around 108,000.
The combined entity could thus cover close to 250,000 beneficiaries, making it one of the biggest schemes in the country.
The Competition Commission said that it is of the view that the proposed transaction is unlikely to substantially lessen or prevent competition in any market.
To address public interest concerns, the merger parties will not retrench any employees as a result of the merger for a period of two years following the merger implementation date.
Issued on BusinessTech by Staff Writer | https://businesstech.co.za/news/business/835769/two-major-medical-schemes-in-south-africa-merging/
