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[2014] ZACT 68
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Imperial Group Limited v Chamber Lane Properties 3 (Pty) Ltd (019612) [2014] ZACT 68 (18 November 2014)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case No: 019612
In the matter
between:
IMPERIAL
GROUP
LIMITED
......................................................................
Primary
Acquiring Firm(s)
And
CHAMBER
LANE PROPERTIES 3 (PTY)
LTD
................................................
Primary
Target Firm(s)
Panel: Yasmin Carrim
(Presiding Member)
: Andreas Wessels
(Tribunal Member)
: Fiona Tregenna
(Tribunal Member)
Heard on : 22
October 2014
Order Issued on : 22
October 2014
Reasons Issued on :
18 November 2014
Reasons for
Decision
Approval
[1] On 22 October
2014 the Competition Tribunal (“Tribunal”)
unconditionally approved an acquisition by Imperial Group
Limited of
Chamber Lane Properties 3 (Pty) Ltd.
[2] The reasons for
unconditionally approving the proposed transaction follow hereunder.
Parties to the
Transaction
Primary acquiring
firm
[3] The primary
acquiring firm is Imperial Group Limited (“Imperial”), an
unlisted company incorporated in terms of
the laws of South Africa
and a wholly-owned subsidiary of Imperial Holdings Limited (“Imperial
Holdings”). Imperial
Holdings is a diversified industrial
services and retail group listed on the Johannesburg Securities
Exchange Limited (JSE). Imperial
Holdings is not controlled, either
directly or indirectly, by any firm.
Primary target
firm
[4] The target firm
is Chamber Lane Properties 3 (Pty) Ltd (“Chamber Lane”)
in respect of certain light industrial,
immovable property situated
in Linbro Park, Gauteng (“Target Property”). Chamber Lane
is a joint venture between investment
company Brait South Africa and
property development group Intraprop.
Proposed
Transaction
[5]
The proposed transaction involves the acquisition of immovable light
industrial property of about 45 000m
2
In addition thereto, the transaction includes the development of
warehousing and office space totalling roughly 20 000m
2
.
The Target Property will be leased exclusively to Midas, a subsidiary
of Imperial Holdings, for a period of 10 years.
Rationale
[6] Imperial submits
that the proposed transaction is in line with its strategy of
acquiring and owning the industrial properties
from which its
subsidiaries and/or business divisions operate. Chamber Lane submits
that the transaction represents a good return
on investment and
provides it with the requisite cash injection to effect further
commercial property developments.
Relevant Market
and Impact on Competition
[7]
The merging parties submit that the relevant market is the market for
“
rentable
industrial space for the warehousing of goods and ancillary services
”
within
the Linbro park area.
1
Within this market, they submit that their combined market share will
be minima!, at below 2%.
[8]
The Commission submits that there exists a horizontal overlap in the
market for the provision of rentable industrial property
but notes,
correctly in our view, that since the Target Property is to be leased
within the Imperial Group,
I.e.
it
will not be available to external third parties, the transaction in
no way alters the structure of the market.
[9] We thus find
that while there may exist an overlap between the merging parties’
properties, the activities for which they
use those properties are
entirely dissimilar. Imperial intends to only lease the Target
Property internally and it will thus not
form part of the open
market.
[10] Accordingly,
the Commission concluded that the proposed transaction is unlikely to
alter the structure of the market whatsoever.
Further, it is unlikely
to substantially prevent or lessen competition in the relevant
market, however one elects to define it.
Public Interest
[11] The
Commission identified no public interest concerns likely to arise
from the proposed transaction and we
are in agreement with this
determination.
Conclusion
[12] In light of the
above we conclude that the proposed transaction is unlikely to
substantially prevent or lessen competition
in the relevant market,
nor does the merger raise any public interest concerns that would
alter that conclusion. Accordingly, we
approve the transaction
unconditionally.
18
November 2014
DATE
Ms Yasmin Carrim
Mr Andreas
Wessels and Ms Fiona Tregenna concurring
Tribunal Researcher:
Shannon Quinn
For the merging
parties: Floris Potgieter of De Vries Inc.
For
the Commission: Lana Norton and Xolela Nokele
1
Page
62 of the Record