Regulator Stops Debswana Pension from Buying Life Insurer

The Competition and Consumer Authority has rejected a proposed acquisition by Debswana Pension Fund (DPF) of a 50 percent stake in Bona Life Insurance , citing risks to competition, market concentration and broader public interest concerns.

The authority said the transaction would have significantly altered the structure of the pension and long-term insurance markets, potentially weakening competition and entrenching dominance among a small group of large institutional players.

Under the deal, DPF would have acquired half of Bona Life from Foudello . Foudello is majority owned by Botswana Opportunities Partnership , with a minority stake held by Botswana Public Officers Pension Fund (BPOPF).

The CCA said the transaction would have created overlapping vertical and horizontal linkages across key segments of the financial services value chain, including pension fund provision, administration and long-term insurance.

DPF participates in pension administration through Mmila Fund Administrators , while BPOPF operates via NMG Administrators Botswana . The regulator said the proposed structure would have effectively placed major pension funds and a life insurer within a closely connected ownership ecosystem.

This, it argued, would likely result in a substantial lessening of competition, increase the risk of dominance in the life insurance segment and reinforce existing concentration in the pension fund industry.

The authority also raised concerns about common ownership between a dominant institutional investor and a major life insurer, warning that such alignment could skew incentives and disadvantage competing firms.

It further cited the risk of coordinated conduct, noting that closer ties between DPF, BPOPF and their respective administrators could facilitate the exchange of commercially sensitive information, undermining fair competition.

The CCA said vertical integration across pension fund management, administration and insurance provision could influence procurement decisions, potentially leading to preferential treatment within affiliated entities and gradual market foreclosure.

It also warned that the deal would strengthen control linkages between the target insurer and the country’s largest pension funds, which are key institutional purchasers. This, it said, could undermine the viability of independent administrators in an already concentrated market.

Barriers to entry were another concern. The regulator said smaller firms, including SMMEs, would face increasing difficulty entering or expanding in the administration segment, as fund-linked administrators benefit from captive mandates, scale and stronger financial backing.

The authority also identified a structural conflict of interest arising from pension funds owning a life insurer, arguing that procurement decisions could be influenced by incentives to maximise returns from affiliated entities rather than prioritising competitive outcomes for fund members.

From a public interest perspective, the CCA warned that the merger could reduce consumer choice, increase costs and limit innovation. It also flagged potential job losses if smaller firms were squeezed out, alongside broader systemic risks associated with higher concentration in institutions managing retirement savings.

“Increased concentration may also heighten the risk for fund members, given that failure within a dominant entity could have widespread implications,” the authority said.

The CCA concluded that standard remedies, such as behavioural commitments or governance safeguards, would not be sufficient to address the structural risks posed by the transaction.