COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No:65/LM/Oct10
In the matter between:
Atterbury Investment Holdings Limited Acquiring Firm
And
Abacus Property Holdings (Pty) Ltd Target Firm
Panel : Yasmin Carrim (Presiding Member),
Andreas Wessels(Tribunal Member)
and Medi Mokuena (Tribunal Member)
Heard on : 03 November 2010
Order issued on : 03 November 2010
Reasons issued on : 10 November 2010
Reasons for Decision
Approval
1] On 3 November 2010 the Competition Tribunal (“Tribunal”) approved
the merger between Atterbury Investment Holdings Limited and
Abacus Property Holdings (Pty) Ltd. The reasons for approval follow
below.
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The Transaction
2] The primary acquiring firm is Atterbury Investment Holdings Ltd (“AIH”),
AIH’s four largest shareholders are Waterfall Development Company
(Pty) Ltd, Sanlam Life Insurance Ltd, Mergon Foundation and BNF
Investments. AIH is a company which functions as an investment
vehicle responsible for the development of various properties in the
commercial, retail, industrial and residential sectors throughout South
Africa.
3] The primary target firm is Abacus Property Holdings (Pty) Ltd (“APH”).
APH is controlled by the Abacus Trust. The Trustees who control the
Trust are Willem Jacobus Odendaal, Cornelius Naude Howard, and
Gary Vogelman. The Trust is involved in investment and development
of various properties, in particular regional retail shopping centres. APH
is a dormant entity which is currently wholly owned by the Trust.
4] In terms of the proposed transaction, AIH and the trustees of the
Abacus Trust will both contribute certain retail properties and / or
shares to APH, in exchange for shares in APH. AIH and the Trust will
ultimately enjoy joint control over APH. AIH will hold approximately
66.9% and the Trust will (indirectly) hold approximately 33.1% of the
shares in APH. Post merger the transaction will create a joint venture
property fund. The assets controlled by the joint venture will be
Mooiriver Mall, Skybird (an undeveloped property in Stellenbosch),
Eikestad Mall, Design Square, AIH and Attfund shares.
The Rationale
5] AIH is active in the property investment market, however its key focus
is the investment, management and provision of rentable office space
in South Africa. Design Square (in Brooklyn, Pretoria) is one of the
retail properties currently owned / controlled by AIH. The motivation for
the merger for AIH was that Design Square would be better managed
by an investment fund focusing specifically on large retail
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developments available for rent.
6] The intention of the Trust has always been to develop its position as an
entity responsible for the holding of fully developed and rentable
property on a long term basis. APH was subsequently incorporated to
give effect to this intention. The parties submit that the proposed
transaction will enable the Trust to succeed in consolidating its position
as a holder of fully developed and trading assets on a long term basis,
notwithstanding that it will only be a minority shareholder in APH.
Furthermore the implementation of the proposed transaction will give
rise to economies of scale, cost efficiencies, as well as the
improvement of APH’s asset management skills with a view to enhance
the yield attained by the assets to be held by APH.
The parties and their activities
Acquiring Firm
7] AIH is an investment vehicle responsible for the management of
various assets and properties in the commercial, retail, industrial and
residential sectors of South Africa. As stated above AIH focuses
predominantly on its investment and asset management functions as
regard to rentable office space. AIH is active in the property investment
market and is inter alia responsible for the provision of rental services
in this marker.
The Trust
8] The Trust Holds and manages various rentable retail properties in
different geographic markets.
The Primary Target Firm
9] APH is a dormant entity which had been incorporated to give purpose
to the proposed transaction. Pursuant to the implementation of the
transaction, APH will also act as an investment vehicle responsible for
managing the transferred properties which entails inter alia the leasing
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of retail space to various suitable tenants.
The relevant market and the impact on competition
10]Both the Commission and the merging parties defined the market as
the market for the holding of and the management of rentable retail
properties.
11]There is an overlap in the activities of the merging firms in the market
for the holding of and the management of rentable retail properties as
all the properties that are to be transferred to APH constitute retail
properties which APH will hold and manage. AIH on the other hand
(although its key focus is on rentable office space) currently holds and
manages two retail properties, namely Design Square in Brooklyn,
Gauteng and the De Ville Shopping Centre in Durbanville, Western
Cape.
12]The properties that will be transferred to APH pursuant to the
implementation of the merger are:
a. Mooirivier Mall – which will be transferred to APH by the Trust, is
situated in Potchefstroom, in the North West Province and has a
primary catchment area of Potchefstroom, and a secondary
catchment are of the towns and cities surrounding same;
b. Eikestad Mall and Skybird 1, both of which will be transferred to
APH by the Trust. Both of these properties are situated in
Stellenbosch in the Western Cape.
c. Design Square, which is owned by AIH and will be transferred
by AIH to APH. This property is situated in the Brooklyn node,
and provides services to customers within a primary catchment
area of the surrounding neighbourhood.
13]It is accepted that rental space is not considered to be transportable
1 Skybird is a vacant piece of land adjacent to the Eikestad Mall – both of these
properties are currently being refurbished.
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and thus cannot be imported from one geographic area to another. The
properties to be transferred to APH by the Trust and AIH do not
compete with one another in any geographic nodes. Therefore there is
no geographic overlap in the activities of the merging firms. No market
share accretion occurs as a result of this transaction.
14]In light of the above, we find that the transaction would not substantially
prevent or lessen competition the relevant markets.
CONCLUSION
15]There are no significant public interest issues and we accordingly
approve the transaction.
____________________ 10 November 2010
Yasmin Carrim DATE
Andreas Wessels and Medi Mokuena concurring.
Tribunal Researcher: Thandi Lamprecht
For the merging parties: Edward Nathan Sonnenbergs Inc
For the Commission: Mogalane Matsimela
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