COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 28/LM/Apr11
In the matter between:
Resilient Properties (Pty) Ltd Acquiring Firm
And
Casadobe Props 75 (Pty) Ltd Target Firm
Panel : Norman Manoim (Presiding Member)
Andreas Wessels (Tribunal Member)
Yasmin Carrim (Tribunal Member)
Heard on : 08/06/2011
Order issued on : 08/06/2011
Reasons issued on : 28/06/2011
Reasons for Decision
APPROVAL
1] On 08 June 2011 the Competition Tribunal (“Tribunal”) unconditionally approved
the proposed property transaction involving Resilient Properties and Casadobe
Props. The reasons for approval of the proposed transaction follow below.
THE TRANSACTION AND RATIONALE
2] This is a property merger involving the sale of a single property, being a
shopping centre known as the Grove Mall situated in Equestria, Pretoria. In
terms of the proposed transaction, the primary acquiring firm, Resilient
Properties (Pty) Ltd (“Resilient”) which has an existing stake of 50% in the Grove
Mall, intends to acquire the remaining 50% which is owned by the primary
target firm, Casadobe Props 75 (Pty) Ltd (“Casadobe”).
3] Essentially the transaction is a move from joint to sole control, pursuant which
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Resilient will have sole control over the Grove Mall.
4] Resilient is a property investment company which is mainly active in the rental
of property market for retail space throughout South Africa. Resilient however
does not own any rentable retail space in Equestria Pretoria, except its 50%
share in the Grove Mall. Casadobe is also a property investment company
active in rentable retail space.
5] For Resilient the proposed transaction is in line with its future expansion goal to
increase its ownership profile. Casadobe wishes to dispose of its 50% share in
the Grove Mall as it prefers to be autonomous with unfettered discretion to make
its decisions. Further, the proposed transaction is an opportunity for Casadobe
to realise its investment as it requires cash to re-invest in other developments.
COMPETITION ASSESSMENT
6] The merger gives rise to a horizontal overlap in respect to the provision of
rentable retail space at the Grove Mall. The Grove mall is categorised as a
minor regional centre. The merging parties and the Commission described the
relevant product market as the market for provision of minor rentable retail
space for minor regional shopping centre based on a previous Tribunal
decision1, and the relevant geographic market as Equestria node based on the
type and size of the property2.
7] The Commission found that the proposed transaction is unlikely to substantially
prevent or lessen competition as it will not change the structure of the market
given that it is merely a change from joint to sole control. Hence there is no
market share accretion as a result of the merger. The Commission also found
that there are other shopping centres within 20 kilometres from Equestria node
which are not owned by the merging parties, and which compete with the Grove
mall.
8] This merger does not give rise to any vertical effects.
PUBLIC INTEREST
9] No public interest issues arise from the proposed transaction.
PUBLIC INTEREST
9] No public interest issues arise from the proposed transaction.
1 See Accucap Investment Pty Ltd and Old Mutual Life Assurance Company Case No.: 51/LM/Jul09.
2 See Government Employees Pension Fund and Denel (Pty) Ltd 42/LM/May02.
CONCLUSION
10] Based on the above we conclude that it is unlikely that the proposed merger
would lead to a substantial prevention or lessening of competition in the
property market. Accordingly the proposed deal is approved unconditionally.
____________________ 28/06/2011
N Manoim Date
Y Carrim and A Wessels concurring
Tribunal Researcher: Londiwe Senona
For the merging parties: Vani Chetty Competition Law
For the Commission: Dineo Mashego
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