The Competition Commission has recommended that the Competition Tribunal approve the proposed merger between two of South Africa’s open medical schemes, Fedhealth and Medshield, signaling a major shake-up in the local healthcare industry.
The merger will see Fedhealth acquire Medshield, consolidating the operations of both non-profit medical schemes under one umbrella, and creating a significant player in the open scheme space with nearly 250 000 beneficiaries combined.
What the Merger Involves
- Fedhealth: Offers 15 plans (8 benefit options and 7 efficiency discount options)
- Medshield: Offers 10 plans (8 benefit options and 2 efficiency discount options)
Both entities are non-profit organisations, registered under the Medical Schemes Act and regulated by the Council for Medical Schemes.
They are not owned by, nor do they control, any other firms.
Competition Commission’s Position
In its assessment, the Commission concluded the merger is unlikely to lessen or prevent competition in any relevant market.
As such, it has recommended approval without conditions, though with public interest considerations.
To mitigate potential job losses, the merger parties have committed not to retrench any employees for a period of two years after the merger is implemented.
Strategic Context: Sanlam’s Expanding Role
While no public announcements were previously made by either scheme about the acquisition, the deal comes amid broader strategic realignment:
- Fedhealth recently became Sanlam’s exclusive health partner, following Sanlam’s separation from Bonitas earlier this year
- Medscheme, the administrator for Medshield, is owned by AfroCentric Investment Corporation, which is majority-owned by Sanlam (60% stake acquired in May 2023)
This merger, therefore, consolidates Sanlam’s healthcare ecosystem, integrating product offerings and administrative services under a single, more robust framework.
What’s Next for Members?
Fedhealth has teased a “reboot” of the scheme with a new offering launching from 1 October 2025.
It promises:
- A refreshed health scheme structure
- A member-run board of trustees
- Integrated health and insurance offerings
- Wellness incentives and rewards platforms for members
Fedhealth believes the merger and the Sanlam partnership will allow it to scale, gain corporate market share, and boost long-term sustainability.
What This Means for South Africa’s Medical Scheme Landscape
With around 140 000 Medshield members and 108 000 Fedhealth beneficiaries, the merged scheme will represent one of the largest open medical schemes in the country.
It also signals a tightening race among leading players to deliver integrated, cost-effective health cover as consumers seek more value from their premiums.
The final decision now rests with the Competition Tribunal, which will review the Commission’s recommendation in upcoming hearings.
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