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[2015] ZACT 86
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City Of Cape v Certain immovable property and letting enterprises owned by Paardevlei Properties Proprietary Limited (LM044Jun15) [2015] ZACT 86 (20 July 2015)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: LM044Jun15
In
the matter between:
City
of Cape
Town
Primary Acquiring Firm
And
Certain
immovable
property and
letting
enterprises
owned
by Paardevlei
Properties Proprietary
limited
Primary Target Firm
Panel
: Andreas Wessels (Presiding Member)
: Fiona Tregenna
(Tribunal Member)
:Medi Mokuena (Tribunal
Member)
Heard
on
: 24 June 2015
Order
issued on
: 24 June 2015
Reasons
issued on
: 20 July 2015
Reasons
for Decision
Approval
[1]
On 24 June 2015, the Competition Tribunal ("Tribunal")
unconditionally approved the large merger between the City
of Cape
Town ("the City") and certain immovable property and
letting enterprises owned by Paardevlei Properties Proprietary
Limited ("Paardevlei") (hereinafter referred to as the
''Target Property").
[2]
The reasons for approving the transaction follow.
Parties
to proposed transaction
[3]
The primary acquiring firm is the City, a local authority established
in terms of section 151 of the Constitution of the Republic
of South
Africa.
[4]
The primary target firm is certain immovable property and letting
enterprises owned by Paardevlei. Paardevlei is a private company
incorporated under the laws of South Africa. Paardevlei is a wholly
owned subsidiary of AECI Limited, which is a public company
listed on
the Johannesburg Stock Exchange Limited.
[5]
The Target Property is situated near Somerset West in the Western
Cape Province.
Proposed
transaction and rationale
[6]
The City intends to purchase a 100% undivided share in the Target
Property.
Post-merger,
the City will have sole control over the Target Property.
[7]
Mr Allan
Hannie,
on
behalf
of
the
City,
submitted
that
the
long-term
rationale
for
acquiring
the
Target
Property
is
a
social
housing
development
and
ultimately
a mixed-use
development.
[1]
Competition
assessment
[8]
The Target Property currently has a small industrial component. The
Competition Commission ("Commission") however
concluded
that since the Target Property will be converted into a mixed-use
human settlement post merger, the proposed transaction
raises no
competition concerns.
[9]
We
further
note
that
the
City
submitted
that
it will
honour
the
current
lease
agreements
associated
with the Target
Property.
[2]
[10]
We concur with the Commission's finding.
Public
interest
[11]
The merging
parties
confirmed
that
the
proposed
transaction
will not
have any
adverse
effect
on
employment
in South
Africa.
[3]
[12]
The proposed merger furthermore does not raise any other public
interest concerns.
CONCLUSION
[13]
Given the above, we conclude that the proposed transaction is
unlikely to substantially prevent or lessen competition in any
relevant market. In addition, the proposed transaction raises no
public interest concerns. We therefore approve the proposed
transaction
without conditions.
20
July 2015
DATE
_______________________
Mr
Andreas Wessels
Ms
Medi Mokuena and Prof. Fiona Tregenna concurring
Tribunal
Researcher:
Caroline Sserufusa
For
the merging parties:
Susan Meyer of Cliffe Dekker Hofmeyr Robert Wilson of Webber Wentze
For
the Commission:
l Hugh Dlamini
[1]
See pages 6 and 7 of the transcript.
[2]
See
page
256 of the
merger
record.
Also
see
pages 7
and 8 of the transcript.
[3]
See pages 7 and 135
of the
merger record.