COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 79/LM/JUL07
In the matter between:
OLD MUTUAL LIFE ASSURANCE COMPANY
(SOUTH AFRICA) LIMITED Acquiring Firm
And
SWEET ROSES INVESTMENTS 506 (PTY) LDT Target Firm
_______________________________________________________________
Panel : N Manoim (Presiding Member), Y Carrim (Tribunal
Member), and U Bhoola (Tribunal Member)
Heard on : 31 August 2007
Decided on : 31 August 2007
Reasons issued on : 10 September 2007
REASONS FOR DECISION
APPROVAL
[1] On 31 August 2007, the Tribunal approved the acquisition by Old Mutual Life
Assurance Company (South Africa) Limited (“Old Mutual Life Assurance”) , of a retail
shopping centre known as Knysna Mall owned by Sweet Roses Investments 506 (Pty)
Ltd (“Sweet Roses”).
THE TRANSACTION
[2] The primary acquiring firm is Old Mutual Life Assurance and the target property is
Knysna Mall, which is owned by Sweet Roses. In terms of the transaction Old mutual
Life Assurance intends to purchase the Knysna Mall from Sweet Roses. As a result of
the transaction Old Mutual Life Assurance will acquire control of the target properties.
RATIONALE FOR THE TRANSACTION
[3] Old Mutual Life Assurance is purchasing the properties for investment purposes.
Sweet Roses is selling the properties for economic reasons following an advantageous
offer made to it by Old Mutual Life Assurance.
THE PARTIES’ ACTIVITIES
[4] Old Mutual Life Assurance is controlled by Old Mutual Life Holdings (South Africa)
Limited which in turn is controlled by Old mutual Plc (“Old Mutual”), a public company
listed on London Stock Exchange. Old Mutual has several subsidiaries world wide,
including in South Africa. Old Mutual Life Assurance currently owns six retail properties
with a total Gross Lettable Area (“GLA”) of 93 878 m ² in the Western Cape, as
indicated in table 1. below:
Table 1. The retail properties owned by Old Mutual Life Assurance in the
Western Cape
Property Name GLA (in m 2) Location
Cavendish Square 43 517 Claremont
Mutual Plain 4 129 Mitchell’s plain
OK Bazaars,
Mitchell plain
10 428 Mitchell’s plain
Link Shopping
Centre
9 747 Claremont
Byside Centre 15 574 Table view
Werdmuller Centre 10 483 Claremont
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[5] Apart from its interest in the Knysna Mall, the subject of the instant
transaction, Sweet Roses is a 50% partner in Adelphi Centre Partnership which
owns a shopping centre in Sea Point, Cape Town, known as Adelphi Centre
(“Adelphi”) with a GLA of 12 800 m 2. Sweet Roses also has a 50% interest in Proud
Heritage Properties 175 (Pty) Ltd (“Proud Heritage”). However Adelphi and Proud
Heritage are not included in this transaction and Sweet Roses will continue to retain its
interests in them. Sweet Roses is not controlled by any firm.
THE RELEVANT MARKET
[6] The relevant product and geographic market can broadly be defined as the
Western Cape retail property market. In line with the Tribunal’s findings in Primegro
Properties Ltd and Growthpoint Properties Ltd, 1 where the Tribunal found that retail
property can be divided into regional; community; neighbourhood; local convenience;
retail warehouse and value centres, the commission narrowly defined the market as a
neighbourhood retail shopping centre. They submit further that the geographic market
for neighbourhood retail shopping centre is local. We accept the commissions’ market
definition.
COMPETITION ANALYSIS
[7] The commission submitted that whereas the acquiring firm owns neighbourhood
retail shopping centres in Claremont and Mitchell’s Plain, it owns no retail
neighbourhood property in Knysna, where the target property is situated. In the
commission’s submissions Claremont, Mitchell’s Plain and Knysna do not serve the
same geographic market and as result there is no geographic overlap in the activities of
the parties, as the acquiring firm does not own any neighbourhood retail shopping
centre in Knysna or the broader Garden route area. We agree with the Commission’s
approach.
centre in Knysna or the broader Garden route area. We agree with the Commission’s
approach.
[8] Accordingly, we find that the transaction is not likely to substantially prevent or
lessen competition.
1 29/LM/Jun03
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CONCLUSION
[9] We further find that the transaction does not raise any significant public interest
issues and accordingly approve the merger without conditions.
_______________ 10 September 2007
Y Carrim Date
N Manoim and U Bhoola concurring.
Tribunal Researcher : P S Munyai
For the merging parties : Walkers Inc
For the competition commission : L Madihlaba and M Mohlala
(Mergers & Acquisitions)
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