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[2015] ZACT 46
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Rebosis Property Fund Limited v Ascension Properties Limited (LM223Mar15) [2015] ZACT 46; Wessels J (4 June 2015)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No:
LM223Mar15
DATE:
04 JUNE 2015
In
the matter between:
REBOSIS
PROPERTY FUND
LIMITED
.....................................................
Primary
Acquiring Firm
And
ASCENSION
PROPERTIES
LIMITED
.............................................................
Primary
Target Firm
Panel
: Andreas Wessels (Presiding Member)
:
Prof Fiona Tregenna (Tribunal Member)
:
Medi Mokuena (Tribunal Member)
Heard
on
: 27 May 2015
Order
Issued on
: 27 May 2015
Reasons
Issued on
: 04 June 2015
Reasons
for Decision
Approval
[1]
On 27 May 2015, the Competition Tribunal
(“Tribunal”) unconditionally approved the merger between
Rebosis Property Fund
Limited (“Rebosis”) and Ascension
Properties Limited (“Ascension”).
[2]
The reasons for approving the proposed
transaction follow.
Parties
to transaction and their activities
Primary
acquiring firm
[3]
The primary acquiring firm is Rebosis,
Rebosis is a real estate investment trust listed on the Johannesburg
Securities Exchange
Limited (“JSE”) and is not controlled
by any individual entity.
[4]
Rebosis provides rentable retail space,
office property and industrial property. Relevant to the competition
assessment of the proposed
transaction are Rebosis’s office
properties in Pretoria and Johannesburg.
Primary
target firm
[5]
The primary target firm is Ascension, a
property fund listed on the JSE. Ascension is not controlled by any
single entity.
[6]
Ascension is a property investment
company approved as a Real Estate Investment Trust. It provides
rental space in office and industrial
property. Relevant to the
competition assessment of the proposed transaction are Ascension’s
office properties located in
Pretoria and Johannesburg.
Proposed
transaction and rationale
[7]
In
terms of the proposed transaction, Rebosis will acquire the remaining
70.94% of the B linked unit capital and 100% of the A linked
unit
capital of Ascension.
[1]
Postmerger Rebosis will hold 100% of the A and B linked unit
capital of Ascension.
[8]
The merging parties submitted that the
proposed transaction will enable them to
inter
alia
be a significant listed BEE
property fund and attract a wider investor base.
Impact
on competition
[9]
The Competition Commission
(“Commission”) identified the following two relevant
markets:
•
The
market for the provision of rentable space in Grade B and C office
property in the Pretoria CBD and surrounding nodes (including
Arcadia
and Sunnyside); and
•
The
market for the provision of rentable space in Grade A and B office
property in the Johannesburg and surrounding nodes (including
Braamfontein).
[10]
The
Commission found that the merged entity will have post-merger market
shares of less than 15% in the above-mentioned markets.
[11]
It
is however not necessary for us to take a definitive view in this
case on the exact parameters of the relevant product or geographic
markets. The proposed transaction is unlikely to substantially
prevent or lessen competition in any (potential) relevant market,
whether broadly defined (i.e. more than one grade of office property,
as considered by the Commission in this case (see paragraph
9 above))
or narrowly defined (i.e. each grade of office property considered
separately), given the sizes of the (potential) relevant
markets in
question and the current players active in these (potential) markets.
Public
interest
[12]The
merging parties confirmed that the proposed transaction will not have
a negative impact on employment and that no retrenchments
will result
from the transaction.
[2]
[13]
The
proposed merger raises no other public interest concerns.
Conclusion
[14]
In
light 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.
04
June 2015
DATE
Andreas
Wessels
Prof
Fiona Tregenna and Medi Mokuena concurring
Tribunal
Researcher: Ammara Cachalia
For
the merging parties: Albert Aukema of Cliffe Dekker Hofmeyr
For
the Commission: Nokuphiwa Kunene, Seema Nunkoo and Xolela Nokele
[1]
Pre-merger Rebosis has 29.06% of the B linked unit capital of
Ascension, but does not hold any A
linked
unit capital.
[2]
Merger record, pages 8 and 47.