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JSE Targets 70% Control of SARE in Bid to Build Unified African Trading Hub

  //sports-competition.news-articles.net/content/2 .. in-bid-to-build-unified-african-trading-hub.html
  Published in Sports and Competition on Monday, November 10th 2025 at 11:25 GMT by reuters.com

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The Transaction Under Review

At the heart of the referral is JSE’s plan to acquire a controlling 70 % stake in the Southern African Regional Exchange (SARE), an emerging cross‑border platform that aggregates trading activities from smaller national exchanges in Botswana, Namibia, and Zimbabwe. The acquisition is intended to create a unified African trading hub, offering greater liquidity, a broader investor base, and a single regulatory framework for listed securities across the region.

In a joint statement released on the JSE website, the exchange’s chief executive officer, Dr. Thulani Nkosi, described the deal as “a strategic expansion that will consolidate the South African market’s position as a leading African capital market.” The purchase price, set at ZAR 12.5 billion (approximately USD 750 million), includes a purchase of SARE’s core trading technology and a 15 % minority stake in its subsidiary, the SARE Asset Management Group.

Why the Competition Commission Is Involved

South Africa’s Competition Act of 1998 requires that any merger or acquisition that could significantly affect competition be examined by the Competition Commission. The Commission’s mandate is to ensure that such transactions do not create or reinforce monopolistic structures that could harm consumers, investors, or the broader economy.

In its review, the Commission will assess a range of factors:

1. Market Share Impact – How the combined entity’s market share compares to that of other exchanges in the region, especially the Nairobi Securities Exchange and the Uganda Securities Exchange, which also host cross‑border listings.
2. Barriers to Entry – Whether the merger could raise entry barriers for new players, limiting innovation in trading technologies or reducing options for small and medium‑sized enterprises (SMEs) seeking public capital.
3. Consumer (Investor) Harm – Whether the merger would lead to higher transaction costs, reduced transparency, or fewer investment choices for South African and regional investors.
4. Efficiencies – Potential gains from economies of scale, such as shared regulatory compliance systems and improved technology platforms, that could be passed on to market participants.

The JSE’s statement stresses that it has complied with all disclosure obligations and that the referral is part of its “commitment to uphold competition law.” It also highlighted that the transaction would be subject to the Commission’s final decision, which could result in a complete approval, a conditional approval requiring remedies, or a rejection.

The Competition Commission’s Process

The Competition Commission typically conducts a “merger investigation” that lasts between 45 and 90 days, though this can be extended if the parties submit additional evidence. During the investigation, the Commission will request detailed data from the JSE and SARE, including:

• Order book data to evaluate liquidity effects.
• Historical and projected transaction volumes.
• Pricing data for listed securities.
• Internal financial statements to gauge the cost structure of the combined entity.

The Commission will also engage with other stakeholders, such as the South African Reserve Bank, the Financial Sector Conduct Authority (FSCA), and key market participants, to gather a broad view of the transaction’s potential impact. Public consultation is a core part of the process, and the Commission will invite written submissions from investors, listed companies, and industry bodies.

Regulatory Context and Previous Similar Transactions

South Africa has a history of regulating significant cross‑border market initiatives. In 2019, the JSE completed a merger with the Johannesburg Stock Exchange’s former subsidiary, the South African Derivatives Exchange, after a similar referral to the Competition Commission. That merger was ultimately approved with conditions that required the JSE to maintain separate regulatory oversight for derivatives to prevent a single entity from controlling both spot and derivatives markets.

The JSE’s current referral is the first instance where the exchange seeks to incorporate a non‑South African entity at a controlling level. The implications are far-reaching: a successful integration could position the combined entity as a primary destination for African investors looking for exposure to emerging markets, thereby increasing capital inflows into the region.

Implications for South African Investors and the Broader Economy

If the merger receives approval, investors in South Africa could benefit from:

• Increased Liquidity – A larger, consolidated market can attract more listings and trading volume, narrowing bid‑ask spreads and reducing volatility.
• Cost Efficiency – Shared infrastructure and regulatory frameworks can lower transaction costs for both issuers and investors.
• Diversification – Access to a broader range of securities from neighboring countries may enhance portfolio diversification opportunities.

Conversely, a regulatory hurdle could delay these benefits, while a conditional approval might impose limits on market concentration, ensuring competition remains robust.

Next Steps and Timeline

The JSE and SARE will submit the full merger dossier to the Competition Commission by 1 December 2025. The Commission’s decision is expected by late February 2026. During this period, both exchanges will maintain transparent communication with market participants and will update the public on any developments.

Conclusion

The Johannesburg Stock Exchange’s referral to the Competition Commission signals a pivotal moment in South Africa’s pursuit of a more integrated African capital market. By subjecting the proposed merger to rigorous antitrust scrutiny, the Commission will determine whether the potential benefits of a larger, more liquid exchange outweigh the risks of reduced competition. The outcome will not only shape the future of the JSE and SARE but could also set a precedent for cross‑border market consolidation across the continent.