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COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No.: 016394
In the matter between:
ABSA Bank Limited Primary Acquiring Fi rm
and
Certain movable and immovable assets and claims
(excluding any liabilities) of A Million Up 105 (Pty) Ltd Primary Target Firm
Panel : Yasmin Carrim (Presiding Member)
Andiswa Ndoni (Tribunal Member)
Mondo Mazwai (Tribunal Member)
Heard on : 17 April 2013
Order issued on : 17 April 2013
Reasons issued : 27 May 2013
DECISION
Unconditional approval
[1] On 17 April 2013, the Competition Tribunal (“Tr ibunal”) unconditionally
approved the proposed merger between ABSA Bank Limi ted and Certain
movable and immovable assets and claims (excluding any liabilities) of A Million
Up 105 (Pty) Ltd.
[2] The reasons for approving the proposed transaction follow.
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Parties to transaction
[3] The primary acquiring firm is ABSA Bank Limited (“ABSA Bank”), a wholly-
owned subsidiary of ABSA Group Limited, which provi des a diverse range of
retail, business, corporate and investment banking services to both individual
and corporate clients. ABSA also has a property por tfolio comprising of retail,
office and industrial space.
[4] The primary target firm consists of certain mov able and immovable assets and
claims, excluding any liabilities, of A Million Up 105 (Pty) Ltd (“AMU”). AMU
acquired credit facilities to develop the 15 On Orange complex from ABSA Bank
in 2008. However, AMU failed to comply with its o bligations in terms of those
credit facilities as a consequence of which ABSA filed for its liquidation.
Proposed transaction and rationale
[5] ABSA Bank will acquire AMU assets comprising im movable assets, movable
assets and claims, which include 129 hotel rooms, 1 67 parking bays, 6 retail
property units and 7 residential penthouses.
[6] The rationale for the transaction is for ABSA B ank to recover the money owed
to it by AMU by acquiring these assets and resellin g them at market-related
prices at a later stage.
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[7] The liquidators wish to dispose of all the asse ts in order to satisfy AMU’s major
creditor’s claims
Competition assessment
[8] Both ABSA Bank and AMU are involved in the resi dential property market,
however, ABSA Bank’s residential properties located in the Western Cape are
houses aimed at low income earning customers whilst the residential
properties of AMU that are being acquired are luxur y penthouses aimed at
1 See page 9 of the transcript.
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high income earning customers. Therefore, no produc t overlap arises from
this transaction.
[9] The properties which ABSA Bank owns with the cl osest substitutability
possibility to AMU’s luxury penthouses comprise tow nhouses are located in
Gauteng and therefore there is no geographic overla p in respect of the
residential properties.
[10] ABSA Bank submitted that it does not intend to keep the hotel for a long period
and will therefore continue operating it until ABSA Bank is in a position to sell
the hotel at a market-related price.
Public interest
[11] The merging parties confirmed that the propose d transaction will not lead to
any employment losses.
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[12] No other public interest issues arise as a result of this transaction.
CONCLUSION
[13] Having regard to the facts above, we find that the proposed transaction is
unlikely to substantially lessen or prevent competition in any relevant markets.
Accordingly, we approve the proposed merger unconditionally.
________________ 27 MAY 2013
YASMIN CARRIM DATE
Andiswa Ndoni and Mondo Mazwai concurring
Tribunal Researcher: Nicola Ilgner
For the Commission: Reabetswe Molotsi
For the merging parties: ABSA Legal Competition Te am
2 See pages 5 and 60 of the merger record.