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COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No.: LM138Dec23
In the large merger between:
Barkophor Investments Proprietary Limited Primary Acquiring Firm
And
Izandla Property Fund Proprietary Limited in respect
of the letting enterprise known as Sasol DC
Primary Target Firm
Approval
[1]
On 13 February 2024, the Competition Tribunal (“Tribunal”) unconditionall y
approved the large merger wherein Barkophor Investments Proprietary Limited
(“Barkophor Investments”) intends to acquire the letting enterprise known as
Sasol DC (“Target Property”) from Izandla Property Fund Proprietary Limit ed
(“Izandla Property Fund”).
Panel: A Kessery (Presiding Member)
A Ndoni (Tribunal Member)
F Tregenna (Tribunal Member)
Heard on: 13 February 2024
Order issued on: 13 February 2024
Reasons issued on: 88 March 2024
REASONS FOR DECISION
competitiontri bunal
SOUTH AFRICA
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Parties to the transaction and their activities
Primary acquiring firm
[2]
The primary acquiring firm is Barkophor Investments, a property investment
company. Barkophor Investments is 100% controlled by
Barkophor Investment is 100% owned by historically disadvantaged persons
(“HDP”). The HDP shareholdings in Barkophor are held through .
[3] Barkophor Investments invested in a light industrial property called
.
Primary target firm
[4]
The Target Property is owned and controlled by Izandla Property Fund. The
Target Property is a light industrial property located at corner of Carbon Street
and 8th Avenue, Sasolburg, Free State Province with a GLA of 17 026 m².
Proposed transaction and rationale
Transaction
[5] In terms of the proposed transaction, Barkophor Investments intends to acquire
the Target Property from Izandla Property Fund. Following implementation of
the proposed transaction, Barkophor Investments will own and control the
Target Property.
Rationale
[6]
[7]
The rationale submitted for the acquiring firm is that the proposed transaction
The rationale submitted for the target firm is that the proceeds from the
proposed transaction w ill be used to create liquidity for lzandla Property Fund.
Competition A ssessment
[8] The Comm ission considered the activities of the merging parties and found that
the proposed transaction results in a horizontal overlap in the market for the
provision of light industrial property. The Tribunal has previously decided that
the relevant geographic market for the provision of light industrial property is
w ithin a 12km or 15km radius of the Target Property. In the current case, w e
did not receive any evidence suggesting a departure from this approach.
[9] The Comm ission found that the proposed transaction does not result in a
geographic overlap as the acquiring group's closest light industrial property is
situated in Welkom , in the Free State Province and is approximately 168.61 km
from the Target Property, w hich is in Sasolburg, in the Free State Province.
[1 O] The merging parties subm it that upon imp leme ntation of the proposed
transaction, the acquiring group's market share in the market for rentable light
industrial space in the Sasol burg node w ill change fro. lo to. %.
[11] Having regard to the above, w e are satisfied that the proposed transaction is
unlikely to substantially prevent or lessen competition in the relevant market.
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Public interest assessment
Employment
[12] The proposed transaction will not result in retrenchments or job losses.
[13] Izandla Property Fund has no employees. Its property management functions
are provided by Excellerate Real Estate Services Proprietary Limited, trading
as Excellerate JHI. Post implementation of the proposed transaction, the
Target Property will be managed by Barkophor Investments.
[14] Excellerate JHI has a significant national and international presence in property
management services, and it is unlikely to be negatively affected should it not
continue to manage the Target Property post-merger.
[15] Based on the above, we find that the proposed merger does not raise any public
interest concerns.
Spread of ownership
[16] Barkophor Investment is 100% held by HDPs.
[17] We agree with the merging parties’ submission that the proposed transaction
will result in a promotion of HDP shareholding from % to 100% post-
transaction.
Conclusion
[18] We conclude that the proposed transaction is unlikely to substantially prevent
or lessen competition in any relevant market and does not raise any public
interest concerns.
[19] We therefore approve the proposed transaction without conditions.
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Signed by:Anisa Kessery
Signed at:2024-03-08 14:31 :50 +02:00
Reason:Witnessing Anisa Kessery
08/03/24
Adv. Anisa Kessery Date
Ms Andiswa Ndoni and Prof. Fiona Tregenna concurring
Tribunal Case Manager:
For the Merger Parties:
For the Commission:
Princess Ka-Siboto
Van i Chetty of Van i Chetty Compet ition Law (Pty)
Ltd
Billy Mabatamela and Themba Mahlangu
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