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Case No.: LM123Nov24
In the matter between:
RMB Property Holdco 1 Proprietary Limited;
Atterbury Property Proprietary Limited; and
Geelhoutboom Estate Proprietary Limited
Primary Acquiring Firms
And
Lagoonbay Lifestyle Estate Proprietary Limited Primary Target Firm
Panel: I Valodia (Presiding Member)
A Ndoni (Tribunal Member)
G Budlender (Tribunal Member)
Heard on: 17 January 2025
Decided on: 17 January 2025
Reasons Issued on: 03 February 2025
REASONS FOR DECISION
Introduction
[1] On 17 January 2025, the Competition Tribunal (“ Tribunal”) unconditionally
approved the large merger in which Atterbury Property Proprietary Limited
(“Atterbury’’) and Geelhoutboom Estate Proprietary Limited (“Geelhoutboom”)
each intend to acquire 25% of the issued shares in Lagoonbay Lifestyle Estate
Proprietary Limited (“Lagoonbay”) from RMB Property Holdco 1 Proprietary
Limited (“RMB Property”).
[2] Post-merger, RMB Property, Atterbury and Geelhoutboom will collectively
exercise joint control over Lagoonbay.
COMPETITION TRIBUNAL
REPUBLIC OF SOUTH AFRICA
competitiontribunal
SOUTH AFRICA
Parties and activities
Primary acquiring firms
[3] The primary acquiring firms are RMB Property, Atterbury and Geelhoutboom
which are each incorporated in South Africa.
[4] RMB Property is controlled by
FirstRand Limited ("FirstRand"), a company listed on the Johannesburg Stock
Exchange ("JSE") and not controlled by any single shareholder (all firms directly
and indirectly controlled by FirstRand are collectively referred to as the
FirstRand Group").
[5] Of relevance to this merger are FirstRand Group's property activities, including
the residential property activities to be conducted at the target firm, Lagoonbay.
[6] Atterbury is controlled by Atterbury Property Holdings Proprietary Limited
("APH"). APH is jointly controlled by Atterbury Manfou Proprietary Limited
("Manfou") and RMB Prop Holdco 1 Proprietary Limited ("RMB Prop"). Atterbury
and all the firms it controls, all the firms controlling Atterbury and all the firms
controlled by those firms are collectively referred to as the "Atterbury Group".
[7] The Atterbury Group is a property investment and development company with
a portfolio of investments in properties and developments in commercial,
industrial, residential and retail in Suth Africa.
[8]
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[9] The Geelhoutboom Group is a property investment and development company
that hold s undeveloped hectares of land in George, Western Cape. The
undeveloped land will be developed
[10] The FirstRand Group, Atterbury Group and Geelhoutboom Group are
collectively referred to as the ‘Acquiring Group’.
Primary target firm
[11] The primary target firm is Lagoonbay, a company incorporated in South Africa.
Lagoonbay is wholly owned and controlled by RMB Property.
[12] Lagoonbay does not control any firm.
[13] Lagoonbay is a property investment and development company that holds
undeveloped land in Glentana (Hooge Kraal) George, Western Cape intended
for development as residential property.
Description of the transaction and rationale
[14] In terms of the proposed transaction, Atterbury and Geelhoutboom each intend
to acquire 25% of the issued shares in Lagoonbay from RMB Property.
[15] Post-merger, RMB Property, Atterbury and Geelhoutboom will collectively
exercise joint control over Lagoonbay.
Risk Mitigation Transaction
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[16] Prior to the proposed transaction, RMB Property held a % interest in
Lagoonbay while the loan funding was provided by FirstRand Bank Limited
(“FirstRand”) (who is the ultimate controller of RMB Property).
in
order to mitigate its risk, FirstRand perfected its security and acquired a
in Lagoonbay on 5 August 2024 (the “Risk Mitigation Transaction”).
[17] In the instant transaction, FirstRand (through RMB Property) is also a primary
acquiring firm since FirstRand’s acquisition of Lagoonbay pursuant to the Risk
Mitigation Transaction is being notified. A notification is required since
FirstRand is not disposing all the interest it acquired in Lagoonbay as
contemplated by the Practitioner Update.2
[18] The Competition Commission (“Commission”) found that the change from sole
to joint control over Lagoonbay requires notification, notwithstanding the Risk
Mitigation Transaction, in line with the Constitutional Court’s decision in
Competition Commission of South Africa v Hosken Consolidated Investment
Limited.3
[19] We find no basis to disagree with the Commission’s assessment of the Risk
Mitigation Transaction.
Competition assessment
[20] The Competition Commission (“Commission”) considered the activities of the
merger parties and assessed a horizontal overlap as the merger parties are
involved in the development of vacant land . The Commission also found that
the parties hold vacant land which may be developed for residential purposes
in George, Western Cape.
[21] The Commission mentioned that the Acquiring Group’s vacant land is situated
in Molen Drift, George while Lagoonbay is situated in Hooge Kraal George and
2 Practitioner Update Issue 4: The application of merger provisions of the Competition Act 89 of 1998,
as amended, to risk mitigation financial transactions.
3 2019 (4) BCLR 470 (CC).
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found that these two tracts of vacant land are situated approximately 22km from
each other.
[22] Although neither merger parties’ land has been developed for residential
purposes and whilst the parties respective vacant land is approximately 22km
apart, the Commission nevertheless conducted a worst -case scenario
assessment on the basis that each merg er party’s respective vacant land is
subsequently developed for residential purposes.
[23] After conducting the worst-case scenario assessment, the Commission found
that the merged entity will continue to face constraint from a number of rival
residential land developments in George.
[24] On account of the evidence before us, and after considering the effect of the
proposed transaction on the market for development of vacant land, we agree
with the Commission’s assessment that the proposed merger is unlikely to
substantially prevent or lessen competition in any market.
Public interest assessment
Employment
[25] The merger parties provided an unequivocal undertaking that the proposed
transaction will not have adverse effects on employment.
[26] We find that the proposed transaction is unlikely to raise any employment
concerns.
Promotion of a greater spread of ownership by HDPs and workers in firms in the
market
[27] The merger parties submitted that Lagoonbay’s HDP shareholding will increase
from % to %.
27.1. The parties submit that the level of HDP ownership attributable to
Lagoonbay is 7.24% since prior to the Risk Mitigation Transaction,
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FirstRand’s applicable B -BBEE certificate reflected black ownership of
[28] The Commission d id not agree with the merg er parties’ HDP ownership
calculation, on the following basis:
28.1. The Commission is of the view that on the date the merger was notified,
Lagoonbay was wholly owned by FirstRand Group, and therefore its entire
35.99% HDP shareholding should be attributed to Lagoonbay.
28.2. The FirstRand Group and Atterbury have 35.99% and % shareholding
held by HDPs, respectively. Therefore, the Commission calculated that the
proposed transaction results in the reduction of HDP ownership over
Lagoonbay from 35.99% to percentage points) ((35.99% x
50%) + ( % x 25%) = %).
28.3. The Commission was of the view that the dilution should be viewed in the
context of the proposed transaction because it will enable FirstRand to
reduce its debt by Lagoonbay and facilitate the introduction of shareholders
who will provide additional funding for the developm ent of the Lagoonbay
property.
[29] In the circumstances, w e do not find it necessary to conclude on whether the
proposed transaction promotes a greater spread of ownership, due to the fact
that Lagoonbay will remain transformed with % of its shareholding held
by HDPs post -merger and the development of Lagoonbay (through the
proposed transaction) will generate jobs and opportunities for various service
providers in the Southern Cape region. We concluded that no further
intervention is required.
[30] No other public interest issues arise from the proposed transaction.
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[31] No third party expressed any public interest concerns about the proposed
transaction.
Conclusion
[32] For the reasons set out above, we are satisfied that the proposed transaction
is unlikely to substantially prevent or lessen competition in any relevant market.
Furthermore, the proposed transaction raises no public interest concerns.
[33] We therefore approve the proposed transaction without conditions.
Signed by:lmraan Valodla
Signed at:2025-02-03 18:03:27 +02:00
Reason:Witnessing lmraan Valodia
Prof. lmraan Valodia
03 February 2025
Date
Ms. Andiswa Ndoni and Adv. Geoff Budlender SC concurring.
Tribunal Case Managers:
For the Merger Parties:
For the Commission:
Karabo Orekeng and Juliana Munyembate
Chris Charter and Mmakgabo Mogapi of
Cliffe Dekker Hofmeyr
Nonhlanhla Msiza and Wiri Gumbie
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