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[2013] ZACT 98
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Government Employees Pension Fund v Trevenna Development Company (Pty) Ltd in respect of the Trevenna Building (017640) [2013] ZACT 98 (1 October 2013)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case No.: 017640
In the matter between
Government
Employees Pension Fund
................................................
Acquiring
Firm
And
Trevenna
Development Company (Pty) Ltd
Panel
Andreas
Wessels (Presiding Member)
Andiswa
Ndoni (Tribunal Member)
Mondo
Mazwai (Tribunal Member)
Heard
on
25
September 2013
Order
issued on
25
September 2013
Reasons
issued on :
01
October 2013
Decision
in
respect of the Trevenna Building
Target
Firm
Approval
[1] On 25 September 2013,
the Competition Tribunal (“Tribunal”) unconditionally
approved the merger between the Government
Employees Pension Fund
(“the GEPF”) and Trevenna Development Company (Pty) Ltd
(“Trevenna”) in respect
of the Trevenna Building.
[2] The reasons for
approving the proposed transaction follow.
Parties to transaction
[3] The primary acquiring
firm is the GEPF. The GEPF was established in terms of the Government
Service Pension Act, 57 of 1973,
which has been repealed. It
continues to exist as a juristic person by virtue of the Government
Employees Pension Law, 1996. The
GEPF is a pension fund and has as
its purpose the administration and management of pensions and other
benefits for its members.
The GEPF’s funds are invested in a
variety of assets, including property.
1
Of relevance to the competition assessment of the proposed
transaction is its investment in office property. The investment of
the GEPF’s assets is managed by the Public Investment
Corporation SOC Limited (“the PIC”) in terms of an
investment
mandate. The PIC manages the equity, bonds, money market
and property portfolios of the GEPF.
[4] The target property
is the Trevenna Building. The GEPF and Trevenna are the registered
co-owners of the Trevenna Building. Trevenna
is a property
development and investment company. Trevenna hols a 49% undivided
share and the GEPF holds a 51% undivided share
in the immovable
property and letting enterprise described as Erf 89 Trevenna Township
and Portion 479 of the farm Elandspoort
no. 357 (hereinafter referred
to as “the target property”). According to the
Commission’s findings, the target
property is an A-Grade office
property development in Sunnyside, Pretoria.
Proposed transaction
and rationale
[5] In terms of the
proposed transaction the GEPF will acquire from Trevenna as a going
concern a 49% undivided share in the target
property and letting
enterprise. On implementation of the proposed transaction, the GEPF
will have sole control of the target property.
[6] The GEPF submitted
that the target property falls within the strategy and investment
mandate of the GEPF and this transaction
presents an opportunity for
the GEPF to grow the size and value of its property portfolio.
Trevenna, on the other hand, submitted
that the proposed transaction
presents an opportunity to liquidate its interest in the target
property.
Competition assessment
[7] The activities of the
merging parties overlap with regards to rentable office property. The
Commission defined the relevant
market as the market for the
provision of rentable A-Grade office space within a 5 km radius from
the target property, which geographic
area includes Sunnyside,
Hatfield, Arcadia and the Pretoria CBD. The merged entity will have
an estimated post-merger market share
of less than 15% in such
market.
[8] However, there is no
need for us in this case to take a definitive view on the exact scope
of either the product or the geographic
market. The merged entity’s
postmerger market shares remain low regardless of the precise
market delineation.
2
We therefore conclude that the proposed transaction is unlikely to
raise competition concerns in any relevant market.
Public interest
[9] The merging parties
confirmed that the proposed transaction will have no adverse effect
on employment
3
and the proposed transaction raises no other public interest
concerns.
CONCLUSION
[10] We approve the
merger unconditionally.
Andreas Wessels
01
October 2013
DATE
Andiswa Ndoni and
Mondo Mazwai concurring
Tribunal researcher:
Caroline Sserufusa
For the merging parties:
J S Marais of Adams & Adams
For the Commission: Lana
Norton
1
See
pages 16, 36 and 37 of the merger record.
2
See
merger record pages 40 to 44.
3
See
merger record pages 6 and 45.