COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 52/LM/May12
015040
Macsteel Services Centres SA (Pty) Ltd Acquiring Firm
And
Samson Property Investments SA (Pty) Ltd Target Firm
Panel : Norman Manoim (Presiding Member)
Yasmin Carrim (Tribunal Member)
Andiswa Ndoni(Tribunal Member)
Heard on : 04/07/2012
Order issued on : 04/07/2012
Reasons issued on : 09/07/2012
Reasons for Decision
APPROVAL
[1] On 4 July 2012 the Competition Tribunal (“Tribunal”) unconditionally approved the
proposed transaction between Macsteel Services Centres SA (Pty) Ltd and Samson
Property Investments SA (Pty) Ltd. The reasons for approval of the proposed
transaction follow below.
THE TRANSACTION
[2] This is a horizontal and vertical property transaction. The proposed transaction
involves the acquisition by Macsteel Services Centres SA (Pty) Ltd (“MSCSA”) of
Samson Property Investments SA (Pty) Ltd property (“SPISA”).
[3] In term of the proposed transaction MSCSA intends to acquire 100% of the issued
share capital of SPISA property assets. That way, post merger, MSCSA will have
sole control over SPISA’s properties.
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[4] MSCSA currently rents out SPISA’s properties for the purposes of conducting its
business activities and is the only tenant as SPISA does not rent out its properties to
any other third parties.
THE RATIONALE FOR THE TRANSACTION
[5] MSCSA considers this transaction as a good investment for its business as it will
further enhance its ability to secure property for its business operations. For SPISA
this is an opportunity to realise its property investments, and it considers it a logical
step to sell to its existing and only tenant.
COMPETITION ASSESSMENT
Activities of the merging parties
[6] MSCSA’s key business activities are in the steel market. Though property is not its
main business, it does own several office and light industrial properties, some of
which are leased to third parties. MSCSA also rents light industrial property from
third parties for the purpose of conducting its business. MSCSA’s properties are
located across the country, but the ones relevant for the purpose of this transaction,
are those located within the Germiston and Boksburg nodes.
[7] SPISA is primarily a property investor and derives its income from rentals received
from tenants. It holds various properties, mainly industrial properties, in various
locations including within the Germiston and Boksburg nodes. MSCSA is currently
SPISA’s only tenant.
Horizontal Analysis
[8] The activities of the merging parties overlap horizontally in respect of the provision of
rentable light industrial properties in the Germiston and Boksburg nodes.
[9] In the market for rentable light industrial property in the Germiston node, premerger
MSCSA has 1.39%, and SPISA has 2.40% market share, and the merged entity will
have a combined market share of 3.79% post merger.
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[10] In the market for rentable light industrial property in the Boksburg node, premerger
MSCSA currently has 1.22% and SPISA has 1.37% market share. Post merger, the
merged entity will have a combined market share of 2.59% in that market.
[11] However it is artificial to view these properties as forming part of the competitive
market for light industrial property. Prior to the merger the properties were used
solely by MSCSA and this will continue post merger. The merger does no more than
re-house the properties from one controlled entity of the Samson family to another.
Vertical Analysis
[12] There is a vertical relationship between the merging parties’ activities in that
MSCSA currently rents SPISA’s properties. However this does not raise any
foreclosure concerns as SPISA does not rent its properties to any other third parties
as MSCSA is its only existing tenant.
PUBLIC INTEREST
[13] There are no public interest issues.
CONCLUSION
[14] We conclude that the proposed transaction is unlikely to substantially prevent or
lessen competition in the property market as it does not raise any horizontal
competition concerns or any foreclosure concerns.
____________________ 09 July 2012
N Manoim Date
Yasmin Carrim and Andiswa Ndoni concurring
Tribunal Researcher: Londiwe Senona
For the merging parties: Webber Wentzel
For the Commission: Lerato Monareng
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