COMPETITION TRIBUNAL OF SOUTH AFRICA
In the matter between:
Case No: 68/LM/Jun08
Government Employees Pension Fund Acquiring firm
And
Trevenna Precinct Office Development Target firms
Panel : N Manoim (Presiding Member); U Bhoola (Tribunal Member) and Y
Carrim (Tribunal Member)
Heard on : 14 August 2008
Decided : 14 August 2008
Reasons Issued : 12 September 2008
Reasons for Decision
Approval
[1] On 14 August 2008 the Competition Tribunal issued a Merger Clearance Certificate
approving the merger between Government Employees Pension Fund and Trevenna
Precinct Office Development unconditionally. The reasons appear below.
Parties
[2] The primary acquiring firm is Government Employees Pension Fund (“GEPF)”, a
juristic person established by section 2 of the Government Employees Pension Fund Law
Act 21 of 1996. The Public Investment Corporation Ltd (“PIC”) is a duly authorised
representative of the GEPF. 1 The entire issued share capital of the PIC is held by the
Government of the Republic of South Africa and its representative is the Minister of Finance.
[3] The primary target firm is Trevenna Precinct Office Development (“Trevenna”).
Trevenna is wholly controlled by Trevenna Development Co (Pty) Ltd. 2
1 The PIC was created by the Public Investment Corporation Act 23 of 2004 and is authorized to provide for the
investment of certain money received or held by or on behalf of the Government of the Republic of South Africa
and certain other bodies, councils and funds.2 The shareholders of Trevenna development Co are Atterbury Property (Pty)Ltd 27.5%; Village Trust 25%;
Atterbury Property Development (Pty)Ltd 10%; Attacq Property Fund Ltd 10%; Atterbury Property Holdings
(Pty)Ltd 10%; Sudden Impact Investments 4 (Pty)Ltd 8%; HC Bezuidenhout 6% and PJ Jordaan 3.5%.
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Transaction
[4] In terms of the agreement entered into between the GEPF, represented by PIC, and
Trevenna Development Co (Pty) Ltd, GEPF would acquire an undivided 51% interest in the
letting enterprise known as Trevenna.
Rationale of transaction
[5] From the GEPF/PIC perspective the transaction forms part of the PIC’s property
strategy to increase its investment in fixed properties.
[6] From the sellers perspective the rationale is two fold. Firstly the transaction provides
an opportunity for the current shareholders to realise a portion of their investment. Secondly
the PIC and Government have the ability to attract quality, tenants in the form of government
departments or quasi government institutions and hence partnering with the GEPF/PIC
allows the conclusion of attractive long term lease agreements.
Parties Activities
[7] The parties submit that the GEPF is a pension fund which owns various assets which
are managed by the PIC. According to the parties the GEPF assets are invested in various
assets classes including equities, fixed interests instrument, money market instruments and
properties.3
[8] Trevenna is a grade A office property development located in Sunnyside, Pretoria.
Competition Analysis
[9] The transaction results in an overlap in the activities of the merging parties in respect
of grade A office properties. According to the parties the acquiring firm’s grade A office
property is in Hatfield and Trevenna and the target firm’s property is situated in Sunnyside.
An examination of the market by the Commission revealed that post merger the merging
parties will have 7.8% combined market share in the broader node including Pretoria CBD,
Sunnyside, Arcadia and Hatfield/Hillcrest. We agree with the Commission that the post
merger market share is relatively low to raise any competition concerns.
Conclusion
3 The parties submit that the properties that form part of the asset portfolio include office property, retail property,
industrial property and residential property located in most provinces nationwide.
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[10] Based on the above the transaction will not result in a substantial lessening or
prevention of competition and is accordingly approved unconditionally. In addition there are
no public interest issues.
___________________ 12 September 2008
Y Carrim Date
Tribunal Member
U Bhoola and N Manoim concurring
Tribunal Researcher : Jabulani Ngobeni
For the merging parties : Jowell Glyn Marais Inc
For the Commission : Linda Chung (Mergers and Acquisitions)
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