Fedhealth and Medshield to merge, forming South Africa’s largest medical scheme
Fedhealth and Medshield merger set to create South Africa’s largest medical scheme with 250,000 members
The Competition Commission has recommended that the Competition Tribunal approve the merger between two prominent South African medical schemes, Fedhealth and Medshield.
Fedhealth, an open medical scheme offering 15 plans—including eight benefit options and seven efficiency discount options—plans to acquire Medshield, which provides 10 plans comprising eight benefit options and two efficiency discount options.
Both Fedhealth and Medshield operate as non-profit entities under the Medical Schemes Act and are regulated by the Council for Medical Schemes. Neither scheme is controlled by, nor controls, any corporate entity. No official announcements regarding the acquisition have yet been made public by the schemes themselves.
Recently, Fedhealth became Sanlam’s exclusive strategic health partner after the insurer ended its partnership with Bonitas. Paul Hanratty, Sanlam Group CEO, explained that the collaboration aims to expand access to healthcare through Fedhealth’s flexible and customisable plans.
Fedhealth stated that the merger aligns with its goal of growing its corporate membership base, strengthening its sustainability, and enhancing innovative, member-centric services. The scheme has also announced plans for a “reboot,” including the launch of a new independent medical scheme from 1 October 2025, governed by a board of member trustees.
The new initiative will offer integrated health products, rewards programmes, and wellness incentives to encourage proactive healthcare management among members.
Medshield, the scheme being acquired, is administered by Medscheme, which operates several South African medical schemes and is connected to Sanlam through its ownership by AfroCentric Investment Corporation, a black-owned investment holding company. Sanlam acquired a 60% stake in AfroCentric in May 2023.
According to the most recent figures, Medshield has approximately 140,000 members, while Fedhealth serves about 108,000. If the merger proceeds, the combined scheme would cover close to 250,000 beneficiaries, positioning it among the largest medical schemes in the country.
The Competition Commission has noted that the merger is unlikely to significantly reduce competition in the healthcare market. Furthermore, to address public interest concerns, no employee retrenchments will occur for at least two years following the completion of the merger.
