COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: LM013Apr24
In the matter between:
Community Property Company (Pty) Ltd Acquiring Firm
and
Boitekong Mall C/O Luvon Investments (Pty)
Ltd
Target Firm
Approval
[1] On 5 June 2024, the Competition Tribunal (“Tribunal”) approved the large
merger wherein Community Property Company (Pty) Ltd (“CPC”) intends to
acquire Boitekong Mall and the associated letting enterprise (“Target Property”)
from Luvon Investments (Pty) Ltd (“Luvon”). Post-merger, CPC will solely control
the Target Property.
Panel: M Mazwai (Presiding Member)
I Valodia (Tribunal Member)
A Ndoni (Tribunal Member)
Heard on: 5 June 2024
An order issued on: 5 June 2024
Reasons issued on: 28 June 2024
REASONS FOR DECISION
2
Parties to the transaction and their activities
Primary acquiring firm
[2] CPC is ultimately controlled by Old Mutual Limited, a public company listed on
the Johannesburg Stock Exchange. CPC is a property holding and investment
company specialising in acquiring new and existing shopping centres that cater
to the needs of underserviced communities throughout South Africa. All firms
directly and indirectly controlled by CPC and Old Mutual Limited are called the
“Acquiring Group”.
Primary target firm
[3] The Target Property is wholly owned by Luvon, which is ultimately controlled by
the Moolman Group. The Target Property is a convenience shopping centre
situated at the corner of R510 and Lalabhai Dudhia Drive, Boitekong,
Rustenburg, North-West Province.
Relevant market and impact on competition
[4] The Competition Commission (“Commission”) found that the proposed merger
raises a horizontal overlap as the parties are both active in the provision of
rentable convenience shopping centres. The convenience shopping centre
owned by the Acquiring Group is Gateway Mall in Carletonville, Gauteng with a
Gross Lettable Area (“GLA”) of 9080m2. The convenience shopping centre of the
Target Property has a GLA of 17649 m 2. However, the Commission found no
geographical overlap in the market of rentable convenience shopping centres
since the Acquiring Group’s nearest rentable convenience shopping centre is
located in Carletonville, Gauteng Province, approximately 104 km away.
[5] Given that, we conclude that the proposed transaction is unlikely to substantially
prevent or lessen competition as there is no geographic overlap between the
rentable convenience shopping centres of the merging parties.
3
Creeping Mergers
[6] Section 12A(2)(k) requires the Commission to assess any other mergers
engaged in by a party to a merger for a stipulated time period. The property
sector appears to consistently have relatively higher levels of merger activity. In
the current transaction, the Tribunal noted that CPC notified three transactions
in the previous three years but this was not disclosed in the proposed
transaction.1 In light of merger activity in the sector, the Commission should in
future consider potential concentration through creeping mergers.
Public interest
Employment
[7] According to the merging parties, the proposed transaction will not negatively
impact employment, as there will be no job losses or changes to employment
conditions. The employee representatives of both the Target Firm and the
Acquiring Group have confirmed that they were notified of the proposed
transaction, and no employees have raised any concerns.
Spread of ownership
[8] The Target Property currently has no Historically Disadvantaged Persons
(“HDPs”). CPC has a 28.64% HDP ownership. As a result of the proposed
transaction, the Target Property will have HDP ownership. The transaction
therefore contributes towards the promotion of a greater spread of ownership by
HDPs.
[9] We conclude that the proposed transaction does not raise any public interest
concerns.
1 Community Property Company (Pty) Ltd and Luvon Investments (Pty) Ltd and Twin City (Pty) Ltd in
respect of Sam Ntuli Mall LM180Feb23, Community Property Company (Pty) Ltd and Luvon
Investments (Pty) Ltd, Shoprite Checkers (Pty) Ltd and Falcon Forest Trading 89 (Pty) Ltd in respect to
Property situated at the corner of the N4 and Matthews Phosa Street, Emalahleni Mpumalanga (known
as KG Mall) LM101180Feb23 and Community Property Company (Pty) Ltd Ulundi King Senzangakona
currently owned by Vukile Property Fund Limited LM026May21.