About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Competition Tribunal
SAFLII
>>
Databases
>>
South Africa: Competition Tribunal
>>
2015
>>
[2015] ZACT 21
|
|
Investec Property Fund Limited v Certain property-owning companies and properties controlled by Investec Property (Pty) Ltd (020214) [2015] ZACT 21 (16 March 2015)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case No: 020214
In the matter
between:
Investec
Property Fund
Limited
..............................................................................
Primary
Acquiring Firm
And
Certain
property-owning companies and
properties
................................................
Primary
Target Firms
controlled by
Investec Property (Pty) Ltd
Panel: Andreas
Wessels (Presiding Member)
: Medi Mokuena
(Tribunal Member)
: Mondo Mazwai
(Tribunal Member)
Heard on: 25
February 2015
Order Issued on: 25
February 2015
Reasons Issued on:
16 March 2015
Reasons for
Decision
Approval
[1] On 25 February
2015, the Competition Tribunal (“Tribunal”)
unconditionally approved the merger between Investec
Property Fund
Limited (“Investec Property Fund”) and certain
property-owning companies and properties controlled by
Investec
Property Proprietary Limited.
[2] The reasons for
approving the proposed transaction follow.
Parties to
proposed transaction
Primary acquiring
firm
[3] The primary
acquiring firm is Investec Property Fund, a public company
incorporated in accordance with the laws of South Africa.
It is
controlled by Investec Limited (“Investec”). Investec
Property Fund is a property investment company and listed
on the JSE
limited. Investec is an international specialist bank and asset
manager that provides a diverse range of financial products
and
services to a niche client base.
Primary target
firm
[4] The primary
target firms are three property owning companies that are controlled
by Investec Property Proprietary Limited (“IP”),
a
private company incorporated in accordance with the laws of South
Africa, as well as two rental enterprises namely ingersol enterprise
and Jakaranda enterprise (“rental enterprises”)
controlled by IP (collectively referred to as the “target
firms”).
[5] The three
property owning companies to be acquired are:
•
Erf
145 Isando Property Proprietary Limited (“Erf 145 Isando”);
•
Fleurdal
Properties Proprietary Limited (“Fleurdal”); and
•
Spareprops
Proprietary Limited (“Spareprops”).
[6] IP is a property
development and asset management company. It is ultimately controlled
by Investec.
Proposed
transaction and rationale
[7] The essence of
the transaction is that Investec Property Fund will become the owner
of the aforesaid property owning companies
and the rental
enterprises, i.e. it will acquire 100% of the shares in the target
firms.
[8] Investec
Property Fund submitted that its rationale for the proposed
transaction is to grow and enhance its property portfolio
on behalf
of its shareholders.
[9] IP submitted
that it deems the target firms suitable to be acquired by the
Investec Property Fund in line with the rationale
of the fund.
Impact on
competition
[10] The Commission
found horizontal overlaps between the activities of the merging
parties in the following areas:
(i) the provision of
Grade A and P office space in the Rosebank node;
(ii) the provision
of Grade A and P office space in the Lynnwood/ Menlo Park/ Persequor
Park/ Hazelwood node;
(iii) the provision
of light industrial property in the Isando/ Kempton Park/
Elandsfontein/ Jet Park/ Chloorkop/ Sebenza/ Meadowdale/
Pomona node;
and
(iv) the provision
of light industrial property in the Brakfontein/ Midrand/ Cosmosdal/
Lombardi nodes.
[11] In respect to
these overlaps the Commission found that the merged entity’s
market share for the respective markets remains
below 15% post-merger
and therefore that the proposed merger is unlikely to substantially
lessen or prevent competition in any
market.
[12] We take no view
on whether Grade A office space and Grade P office space in the
above-mentioned nodes constitute the same or
separate relevant
product markets. Even if Grade A office space and Grade P office
space in the respective nodes are considered
as separate relevant
product markets, we have no reason to believe that the proposed
merger is likely to raise significant competition
concerns.
[13] The proposed
transaction furthermore raises no vertical competition issues.
[14] We therefore
conclude that the proposed transaction is unlikely to substantially
prevent or lessen competition in any relevant
market.
Public interest
[15]
The merging parties confirmed that the proposed transaction will not
result in any adverse impact on employment in South Africa.
1
[16] The proposed
transaction further raises no other public interest concerns.
Conclusion
[17] in Sight of the
above, we conclude that the proposed transaction is unlikely to
substantially prevent or lessen competition
in any relevant market.
In addition, no public interest issues arise from the proposed
transaction. Accordingly we approve the
proposed transaction
unconditionally.
16 March 2015
DATE
Andreas Wessels
Medi Mokuena and
Mondo Mazwai concurring
Tribunal Researcher:
Aneesa Ravat
For the merging
parties: Andile Nikani of Fluxmans Attorneys
For the Commission:
Nhiangano Hugh Dlamini, Seema Nunkoo and Xolela Nokele
1
Merger
record,
inter
alia
pages
6 and 153.