COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: LM001Apr15
In the matter between:
BUSINESS VENTURE INVESTMENTS NO.1360
(PTY) LTD AND OLD MUTUAL LIFE ASSURANCE
COMPANY (SA) LTD
And
OLD MUTUAL LIFE ASSURANCE COMPANY (SA)
LTD IN RESPECT OF 50% UNDIVIDED SHARE
Primary Acquiring Firms
IN MENL YN PARK SHOPPING CENTRE AND
BUSINESS VENTURE INVESTMENTS NO.1360 (PTY)
LTD IN RESPECT OF 50% UNDIVIDED SHARE IN
CAVENDISH SQUARE Primary Target Firms
Panel
Heard on
Order Issued on
Reasons Issued on
: Y Carrim (Presiding Member)
: F Tregenna (Tribunal Member)
: M Mokuena (Tribunal Member)
: 3 June 2015
: 3 June 2015
: 18 June 2015
Reasons for Decision
1
Approval
[1] On 3 June 2015, The Competition Tribunal ("Tribunal") unconditionally approved the
acquisition by Business Venture Investments No.1360 (Pty) Ltd ("BVI") for the 50%
undivided share in Menlyn Park Shopping Centre ("Menlyn") and Old Mutual Life
Assurance Company (SA) Ltd ("Old Mutual") for the 50% undivided share in
Cavendish Square Shopping Centre ("Cavendish Square").
[2] The reasons for approving the proposed transaction follow.
Parties to the transaction
[3] The first primary acquiring firm is BVI, a company wholly owned by the Government
Employees Pension Fund ("GEPF"). GEPF is managed by several trustees and is
represented by the Public Investment Corporation ("PIC"). GEPF has various
interests and owns various properties.
[4] BVI does not control any firm but it does have a 50% undivided share in both
Cavendish Square and Menlyn. The other 50% undivided shares in both Cavendish
Square and Menlyn is held by Old Mutual.
[5] The second primary acquiring firm is Old Mutual, a company wholly controlled by Old
Mutual Emerging Markets Limited ("OMEL"). OMEL is controlled by Old Mutual
Group Holdings (SA) (Pty) Ltd.
[6] Old Mutual controls and manages various subsidiaries but relevant for this
transaction as previously stated is its 50% undivided share in both Cavendish
Square and Menlyn.
Proposed Transaction
[7] Old Mutual is selling its 50% undivided share in Menlyn, which is classified as a
super-regional shopping centre, to BVI who already owns the other 50%. In return
BVI is selling its 50% undivided share in Cavendish Square, which is made up of
Cavendish Connect a community centre, Cavendish Square a minor regional
2
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shopping centre, Dreyer Street a local convenience centre and The Place a small
free-standing centre, to Old Mutual who already owns the other 50%. Post-merger
BVI will have sole control of Menlyn Park and Old Mutual will have sole control of
Cavendish Square.
Rationale
[8] The proposed swap transaction presents attractive investment opportunities for both
entities.
Relevant Market and Impact on Competition
[9] BVI is a property investment holding company. The main business of GEPF is to
manage and administer pension funds and other benefits for government
employees. GEPF owns various properties.
[1 O] The Old Mutual Group is a diversified financial services firm and relevant for this
transaction are the various properties that Old Mutual holds and manages.
[11] The Commission found that both parties are active in the market for provision of
rentable retail property and defined the relevant product market as the market for the
provision of comparative centres.
[12] The Commission did not conclude on a geographic market because the proposed
transaction is unlikely to prevent or lessen competition regardless of how the
geographic market is defined. According to the Commission there are no other
comparative shopping centres within a close radius from Menlyn Park or Cavendish
Square.1 More over since it is a swap transaction between existing shareholders the
Commission is of the view that the structure of the retail property market would not
be altered as a result of the transaction.
1 The Commission indicated that there are various shopping centers close by which would constrain the merging
parties even though they are not as large as Menlyn Park and Cavendish Square.
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[13] We agree with the Commission that the proposed transaction raises no competition
concerns due to the absence of a geographic overlap.
Public Interest
[14] The transaction does not raise any public interest concerns.
[15] In light of the above we concluded that the proposed transaction was unlikely to
substantially prevent or lessen competition. Accordingly we approved the proposed
transaction unconditionally.
~~
Ms Y Carrim /
18 June 2015
DATE
Prof. F Tregenna and Ms M Mokuena concurring
Tribunal Researcher:
For the merging parties:
For the Commission:
Lebo Moleko
Albert Aukema and Chris Charter - Cliff Dekker
Hofmeyr
Nolubabalo Myoli and Nompucuko Nontombana
4