COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 86/LM/Oct06
In the matter between:
Lexshell 44 General Trading (Pty) Ltd Acquiring Firm
And
V&A Waterfront Holdings (Pty) Ltd Target Firm
______________________________________________________________
Panel : D.H Lewis (Tribunal Member) M.T.K Moerane (Tribunal
Member), and M Mokuena (Tribunal Member)
Heard on : 04 December 2006
Decided on : 04 December 2006
Reasons Issued: 04 December 2006
REASONS FOR DECISION
Approval
[1] On the 04 th of November 2006, the Tribunal unconditionally approved
the proposed merger between the abovementioned parties. The reasons for
the decision follow.
Parties
[2] The acquiring firm is Lexshell 44 General Trading (Pty) Ltd (“Lexshell”)
a company incorporated under the laws of South Africa. Lexshell is a shelf
company and controls no firm. The following firms have direct control over
Lexshell: London & Regional Group Holding Ltd (“London & Regional”) 1 which
holds 50.1% shares in Lexshell and Istithmar PJSC (“Istithmar”) 2 which holds
24.8% shares of Lexshell 3. Lexshell is a company formed by London &
Regional Holdings (“L&R”), which is involved in traditional prime and
1 London & Regional is a private company incorporated under the laws of England and Wales having
its principal place of business in London. It is a wholly owned subsidiary of Loopsign Ltd a company
incorporated under the laws of England and Wales and having its principal place of business in
London.
2 Istithmar is a company incorporated under the laws of the United Arab Emirates and having its
principal place of business in Dubai.
3 Members of historically disadvantaged group own the other 25.01% shares in Lexshell. See page 47
of the record.
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secondary office and retail commercial investment, sale and leaseback
portfolio, hotels and healthcare, Istithmar Private Joint Stock Company
(“Istithmar”) which is involved in shipyard and yatch repair services, property
and real estate development, and private equity and BEE investors.
[3] The primary target firm is V&A Waterfront Holdings (Pty) Ltd (“V&A
Holdings”)4. V&A Holdings is jointly controlled by Transnet Second Defined
Pension Fund (“TSDPF”), Transnet Ltd (“Transnet”), Transnet Retirement
Fund (“TRF”) and Transnet Pension Fund 5. TSDPF holds 43.6%, Transnet
holds 26%, TRF holds 22.6% and TPF holds 7.8% issued linked units in the
V&A Holdings.
Transaction
[4] In terms of the deed of sale entered into between Lexshell and
Transnet, Lexshell intends to acquire 100% of the issued linked units in V&A
Holdings.
Rationale of the Transaction
[5] From the acquiring group’s perspective the transaction will allow
Istithmar and London & Regional (both of whom are foreign investors) to enter
the South African market on commercially acceptable terms and conditions.
From the target group’s perspective the sale enables Transnet to focus on its
core ports, freight rail and pipeline businesses in South Africa.
Parties’ Activities
[6] Lexshell is a newly formed company controlled by a consortium of
international property and BEE investors. Lexshell and its shareholders
currently provide no products or services in South Africa. London & Regional
is one of Europe’s largets, privately owned, property investment and
development companies with investments in eighteen European countries. It
has interest in traditional prime and secondary office and retail commercial
investment, sale and leaseback portfolio, hotel and healthcare. V&A Holdings
is an investment holding company and does not sell any products nor provide
is an investment holding company and does not sell any products nor provide
any services. The firms 6 controlled by V&A Holdings render services in
property management and development sector, and also has property
investment in retail, office, industrial, residential property. 7
4 V&A Holdings wholly owned subsidiaries are: V&A Properties (Pty) Ltd (“V&A Properties”);
Victoria & Alfred Waterfront (Pty) Ltd (“ V&A Manco”); V&A Waterfront Marina (Pty) Ltd (“V&A
Marina”) and Ebelink (Pty) Ltd (“Ebelink”). V&A Holdings also holds 70% of the beneficial interest in
Two Oceans Aquarium Trust (“ The Trust”) which controls the Two Oceans Aquarium (“Two Oceans
Aquarium”)
5 TSDPF, TPF, TRF are independent pension and retirement funds and are not controlled by any
specific entity.
6 See footnote 4
7 For the various activities in which firms controlled by V&A Holdings are involved in see pages 84 to
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The Relevant Market
[7] The parties submitted in their filing that there is no horizontal overlap
between the business activities of the acquiring group and those of the target
group. According to the parties the acquiring group is also not active in any
product market upstream or downstream to those product markets in which
the target group is active in South Africa. 8 The Commission’s investigation
found that although there is a product overlap between the activities of
merging parties in retail, office property and property development, there is no
geographic overlap between the activities of the merging parties. We
therefore agree with both the merging parties and the Commission view that
the proposed transaction is unlikely to substantially prevent or lessen
competition.
Public Interest Issues
[8] There are no public interest issues .
Conclusion
[9]. Based on the above the transaction will not result in a substantial
lessening or prevention of competition in the identified markets and is
accordingly approved unconditionally.
___________________ 04 December 2006
D. H Lewis Date
Tribunal Member
M Mokuena and M.T.K Moerane concurring.
Tribunal Researcher : J Ngobeni
104 of the record.
8 The target group provides retail, office property development in the Western Cape Province, whereas
the acquiring group is active in more than 18 countries excluding South Africa.
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For the merging parties : Pieter Steyn (Werksmans); Dave Thompson
(Cliffe Dekker) and Andries Le Grange
(Hofmeyr)
For the Commission : Mulalo Ratshisusu
Mergers and Acquisitions
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