Waterview Close Properties Proprietary Limited v Erven 6[...], 6[...] and 6[...] Montague Gardens (Reasons) (LM121Nov24) [2026] ZACT 1 (18 February 2025)

70 Reportability

Competition Law

Brief Summary

Competition Law — Merger Approval — Waterview Close Properties acquires Target Properties from Smerelda Property Investments. The Tribunal conditionally approves the merger, finding no substantial lessening of competition or public interest concerns.

Comprehensive Summary

Summary of Judgment

1. Introduction

These proceedings concerned a large merger determination before the Competition Tribunal of South Africa under the Competition Act 89 of 1998. The Tribunal was required to decide whether to approve, prohibit, or approve subject to conditions a proposed acquisition of immovable property.

The primary acquiring firm was Waterview Close Properties Proprietary Limited (“Waterview”). The primary target firms were the immovable properties described as Erven 6[...], 6[...]2 and 6[...]3 Montague Gardens (the “Target Properties”), which were being acquired from Smerelda Property Investments Proprietary Limited (“Smerelda” or the “Seller”), the then owner of the Target Properties.

The procedural history reflected that the merging parties applied to the Competition Commission for approval on 8 November 2024, and the matter was referred to the Tribunal in terms of section 14A of the Competition Act. The Tribunal heard the matter on 21 January 2025, decided it on 21 January 2025, and subsequently issued reasons on 18 February 2025. The Tribunal issued an order approving the merger in terms of section 16(2)(b), and directed that a Merger Clearance Certificate be issued.

The general subject-matter of the dispute was whether the acquisition of the Target Properties by Waterview raised any competition or public interest concerns, with the Tribunal ultimately addressing in particular the public interest factor concerning the promotion of a greater spread of ownership contemplated in section 12A(3)(e) of the Act.

2. Material Facts

Waterview was described as a newly incorporated company in South Africa which did not at the time provide any products and/or services. Waterview was ultimately controlled by Super Group (“SGHC”) Limited (“Super Group”), which controlled various other firms in South Africa, including Digital Outsource Services (Pty) Ltd (“DOS”), Osiris Trading (Pty) Ltd, and Raichu Investments (Pty) Ltd. Super Group was described as an NYSE-listed holding company of global sports and iGaming brands, including interactive gaming and sportsbook brands.

The Target Properties consisted of three separate erven on which four A-grade office buildings had been erected, described as Waterview Park in Century City, Cape Town. The Target Properties were owned by Smerelda, a property investment firm controlled by Cape Prop Limited. DOS managed the Target Properties and sub-leased space to various entities in the acquiring group. The Tribunal recorded that DOS planned to continue managing the Target Properties after implementation.

A material factual feature was that, at the time of the merger assessment, the acquiring group already leased the Target Properties from Smerelda. The Commission’s investigation further revealed that a portion of the roof area of the Waterview Park 2 building was let separately by Smerelda to a third party (redacted in the reasons). The merging parties indicated that the relevant rights connected to the rooftop space would persist post-merger.

In respect of public interest and employment, the Tribunal recorded that the merging parties submitted that the transaction would not result in retrenchments or job losses, and that both Waterview and the Target Properties did not have any employees. The Tribunal also recorded the Commission’s finding that the Target Properties were currently managed by the acquiring group, which held the head lease for the Target Properties.

As to the public interest factor of spread of ownership, the Commission noted that neither Waterview nor Smerelda (in relation to the Target Properties) had shareholding held by historically disadvantaged persons (“HDPs”). The Commission requested the merging parties to indicate how the transaction would promote a greater spread of ownership under section 12A(3)(e). The merging parties submitted that no remedies were warranted, but proposed a condition (content partly redacted) which the Commission accepted and which formed the basis for the Tribunal’s conditional approval.

3. Legal Issues

The central legal questions before the Tribunal were whether the proposed transaction was likely to result in a substantial prevention or lessening of competition in any relevant market in South Africa, and whether the transaction raised public interest concerns requiring conditions or prohibition under section 12A of the Competition Act.

The dispute primarily concerned the application of law to fact within the statutory merger-control framework. The Tribunal’s task involved assessing (i) the competitive effects of the transaction based on the parties’ activities and market presence, and (ii) the statutory public interest factors, including employment and the promotion of a greater spread of ownership as contemplated by section 12A(3)(e). The decision also involved a limited evaluative judgment as to whether the tendered condition sufficiently addressed the identified public interest consideration.

4. Court’s Reasoning

On the competition assessment, the Tribunal accepted the Commission’s finding that the transaction did not give rise to a horizontal overlap, because the acquiring group was not in the market for the provision of rentable office property. The Tribunal further accepted the Commission’s assessment that no vertical concerns arose from the transaction. In line with the Commission’s recommendation, and after considering the merging parties’ submissions, the Tribunal concluded that the merger was unlikely to lead to a substantial lessening or prevention of competition in any market in South Africa.

In reaching that conclusion, the Tribunal noted the factual position that the Target Properties were already leased to the acquiring group, with the exception of a separately leased portion of rooftop space. The Tribunal recorded the parties’ indication that rights concerning the rooftop space would persist after the merger. The Tribunal treated these facts as consistent with its overall conclusion that the merger did not raise competition concerns.

On public interest, the Tribunal dealt with employment first. It accepted the merging parties’ submission that there would be no retrenchments or job losses and recorded that neither Waterview nor the Target Properties had employees. In light of these facts, the Tribunal found that there were no employment concerns arising from the merger.

The Tribunal then considered the promotion of a greater spread of ownership, focusing on the Commission’s observation that neither side of the transaction had HDP shareholding. The Tribunal recorded that the Commission requested the parties to address this and that, although the merging parties contended that no remedies were warranted, they nevertheless proposed a condition (set out in Annexure A, with certain details redacted). The Tribunal accepted that the Commission regarded this commitment as satisfactory and, after considering the submissions and the tendered condition, concluded that the transaction did not raise public interest concerns warranting further intervention under section 12A(3)(e).

Finally, the Tribunal recorded that no evidence or submissions were presented indicating any other public interest concerns, and it expressed satisfaction that the merger would not negatively impact the factors set out in section 12A(3) of the Act. It therefore approved the merger on the basis of the condition contained in Annexure A to its order.

5. Outcome and Relief

The Tribunal conditionally approved the large merger on 21 January 2025. It ordered that the merger be approved in terms of section 16(2)(b) of the Competition Act and directed that a Merger Clearance Certificate be issued in terms of Competition Tribunal Rule 35(5)(a).

The approval was expressly made subject to conditions set out in Annexure A. Those conditions included a procurement-related condition (with certain substantive terms redacted) and a monitoring regime requiring notification of the implementation date and periodic compliance reporting by affidavit, with provision for the Commission to request further information. The conditions further addressed the process for dealing with an apparent breach by reference to the relevant rules, and provided for variation of conditions by application to the Tribunal on good cause shown.

The decision and order did not record any separate or specific costs order.

Cases Cited

No case law was expressly cited in the Tribunal’s reasons or order.

Legislation Cited

Competition Act 89 of 1998 (as amended), including sections 3(2), 12A(3), 12A(3)(e), 14A(1)(b), 16(1), 16(2)(b), 16(3), 19, 26, 27(2).

Rules of Court Cited

Competition Tribunal Rules for the Conduct of Proceedings, rule 35(5)(a) and rule 37.

Rules for the Conduct of Proceedings in the Competition Commission, rule 39.

Held

The Tribunal held that the proposed acquisition of the Target Properties by Waterview was unlikely to substantially prevent or lessen competition in any relevant market, given the absence of a horizontal overlap and the absence of vertical concerns on the facts presented.

The Tribunal further held that the merger did not raise public interest concerns requiring prohibition or additional intervention. In particular, it accepted that there were no employment-related concerns because neither Waterview nor the Target Properties had employees, and it accepted the tendered condition (as agreed with the Commission) as sufficient in relation to the public interest consideration concerning the promotion of a greater spread of ownership under section 12A(3)(e).

The Tribunal accordingly approved the merger subject to the conditions in Annexure A, and directed issuance of a merger clearance certificate.

LEGAL PRINCIPLES

The Tribunal applied the statutory merger-control framework under the Competition Act 89 of 1998, requiring an assessment of whether a merger is likely to substantially prevent or lessen competition, and, separately, whether the merger implicates public interest factors set out in section 12A(3).

In applying competition principles to the facts, the Tribunal treated the absence of the acquiring group’s participation in the relevant market for the provision of rentable office property as decisive for concluding that there was no horizontal overlap, and it accepted that the facts did not disclose vertical foreclosure or related concerns.

In relation to public interest, the Tribunal applied the statutory factors by evaluating the merger’s impact on employment and on the promotion of a greater spread of ownership (section 12A(3)(e)). The Tribunal’s approach reflected that, where a public interest concern is engaged, it may approve a merger subject to conditions, and it may rely on a monitoring and enforcement framework referencing the Tribunal and Commission rules for compliance, breach, and variation of conditions.