IN THE COMPETITION TRIBUNAL OF SOUTH AFRICA
CASE NO: 87/LM/AUG08
In the merger between:
Absa Bank Limited Primary Acquiring Firm
and
Retail Africa Wingspan Investments (Proprietary) Limited Primary Target Firm
______________________________________________________________________
Panel : D Lewis (Presiding Member), N Manoim (Tribunal Member), and
Y Carrim (Tribunal Member)
Heard on : 8 October 2008
Order issued on : 8 October 2008
Reasons issued on : 22 October 2008
REASONS FOR DECISION
APPROVAL
[1] On 8 October 2008 the Tribunal unconditionally approved the property merger
between the aforementioned parties. The reasons for the decision follow:
THE MERGING PARTIES
[2] The primary acquiring firm is ABSA Bank (“Absa”) which owns the following retail
shopping centres: Ballito Junction i; a neighborhood shopping centre situated in Ballito,
Kwazulu Natal; Maxcity shopping centre; a community shopping centre situated in
Mamelodi in Pretoria, Valley shopping centre; a neighbourhood shopping centre
1
situated in Dainfern in Johannesburg, and Krugersdorp shopping centre, a super-
regional shopping centre in Krugersdorp, currently under construction.
[3] The primary target firm is Retail Africa Wingspan Investments (“Wingspan”), a
property fund which principally holds newly developed shopping centres, of which
relevant to this transaction are five retail shopping centres: Irene Village Mall (Phase 1);
a community shopping centre situated in Centurion, Irene Village Mall (Phase 2); a
community shopping centre in Centurion still under construction, Westwood Mall; a
regional shopping centre in Durban still under construction, West Coast Mall; a
community shopping centre in Vredenburg which is still under construction, and the
Village at Hartebeespoort (phase 1); a community shopping centre in Hartebeespoort
which is also still under construction.
[4] Wingspan is jointly controlled by Eygenberger Investment, Kruger Investment
Trust, Oak Tree Trust, Pickard Investment Trust and Wingspan Investment Trust, which
in turn are jointly controlled by Rapfund Holdings, Retail Africa (Pty) Ltd and Retail
Africa Asset Management (Pty) Ltd.
THE TRANSACTION AND RATIONALE
[5] In terms of the transactions ABSA intends to acquire 30% of the entire issued
share capital of Wingspan with minority protection rights relating to material strategic
and commercial decisions. The existing Wingspan shareholders will dilute their shares
pro rata to facilitate the 30% purchase by Absa. Post transaction no single shareholder
will be able to exercise sole control over Wingspan, but Absa is in a position to exercise
joint control with one or more of the minority shareholders.1
[6] According to Absa the proposed transaction is part of its wider property
investment strategy. Wingspan’s shareholders regard this as an opportunity to generate
cash to fund future expansion and growth opportunities.
COMPETITION EVALUATION
cash to fund future expansion and growth opportunities.
COMPETITION EVALUATION
1 The balance of the shares in Wingspan (i.e. 70%) will be retained by the existing shareholders –
Eygenberger Trust (14.31), Kruger Trust (17.11%), Oak Tree Trust (1.40%), Pickard Trust (18.50%),
Wingspan Investment Trust(18.50%), and Cahi (0.17%).
2
[7] According to the Commission and the parties, there is a minor overlap in
respect of community shopping centres, however there is no geographic overlap as
Absa does not have any community or other shopping centre in Centurion, Vredenburg
and Hartebeespoort where Wingspan’s properties are situated. 2
CONCLUSION
[8] In light of the above, we find that this merger will not result in any substantial
lessening or prevention of competition in any of the relevant markets in the property
sector. Accordingly, we approve the merger without conditions.
[9] There are no public interest issues.
_______________ 22 October 2008
N Manoim Date
Tribunal Member
D Lewis and Y Carrim concur in the judgment of N Manoim
For the merging parties : M. Griffiths and A. van Loggerenberg
For the Commission : K. Mahlakoane
(Mergers and Acquisitions)
Tribunal Researcher: L Xaba
2 Shopping centres are defined according to size. The phrase community shopping centre refers thus to
the centres size and not its location.
3
i See recent transaction between Absa and Ballito Junction which we unconditionally
approved on 23 September 2008 – Case No: 84/LM/Aug08.