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[2015] ZACT 72
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K2015068356 (South Africa) (Pty) Ltd v Pearl Valley Golf Estates (Pty) Ltd and Another (LM149Oct15) [2015] ZACT 72 (3 December 2015)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: LM1490ct15
In
the matter between:
K2015068356
(South Africa) (Pty)
Ltd
Acquiring Firm
And
Pearl
Valley Golf Estates (Pty) Ltd
Seven
Wood Trading 57 (Pty)
Ltd
Target Firms
Panel
: Andreas Wessels (Presiding Member)
: lmraan Valodia
(Tribunal Member)
: Medi Mokuena (Tribunal
Member)
Heard
on
: 25 November 2015
Order
Issued on
: 25 November 2015
Reasons
Issued on
: 03 December
2015
Reasons
for
Decision
Approval
[1]
On 25 November 2015, the Competition Tribunal ("Tribunal")
unconditionally approved the proposed transaction involving
K2015068356 (South Africa) (Pty) Ltd ("K2015068356"), the
business of Pearl Valley Golf Estates (Pty) Ltd ("Pearl
Valley")
and the entire issued share capital of Seven Wood Trading 57 (Pty)
Ltd ("Seven Wood").
[2]
The reasons for approving the proposed transaction follow.
Primary
acquiring firm
[3]
The acquiring firm is K2015068356, a company incorporated in terms of
the laws of the Republic of South Africa and established
specifically
for the purposes of the proposed transaction. It therefore does not
currently conduct any operations. It is controlled
by Val de Vie
Investments Two (Pty) Ltd ("Val de Vie") and PV Consortium
(Pty) Ltd ("PV Consortium"). K2015068356,
Val de Vie and PV
Consortium do not control any other firms.
[4]
The acquiring group has a diverse investment portfolio in listed
equities, property, agriculture, financial services, hospitality,
marketing management and property development. The group's luxury
residential properties in the Western Cape are relevant to the
assessment of the proposed transaction.
Primary
target firms
[5]
The primary target firms are Pearl Valley and Seven Wood which are
both companies incorporated in accordance with the
laws of the
Republic of South Africa. Pearl Valley is controlled by LC Golf SA
(Pty) Ltd ("LC Golf"). LC Golf is controlled
by the
Standard Bank of South Africa Limited (acting through its Real Estate
Investment Division). Pearl Valley controls Seven
Wood.
[6]
Pearl Valley holds and manages the Pearl Valley Golf and Country
Estate, a residential golf and lifestyle community estate
situated in the Cape Winelands in the Western Cape. Seven Wood
conducts an estate agency business in relation to the residential
properties on Pearl Valley.
Proposed
transaction and rationale
[7]
In terms of the proposed transaction, K2015068356 seeks to acquire
the business of Pearl Valley and 100% of the issued share
capital of
Seven Wood.
[8]
The acquiring group submitted that Pearl Valley is a commercially
viable business which would enable it to increase returns
for its
investors in the market for luxury residential estates in South
Africa.
[9]
The Competition Commission ("Commission") assessed the
competition effects of the proposed transaction in the market
for
luxury residential estates in Paarl and the surrounding areas
including Stellenbosch and Franschoek. The merged entity will
have a
post-merger market share of less than 15% in this market. Based on
this market share and that the merged entity will be
constrained by
other players post merger, the Commission found that the
proposed transaction was unlikely to result in a substantial
lessening or prevention of competition in this market.
[10]
We concur with the Commission that the proposed transaction is
unlikely to substantially prevent or lessen competition in any
relevant market.
Public
interest
[11]
The merging
parties confirmed
that
the
proposed
transaction
will
not
have
any adverse
effect on employment.
[1]
[12]
The proposed transaction further raises no other public interest
concerns.
Conclusion
[13]
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.
03
December 2015
Date
______________________
Andreas
Wessels
lmraan
Valodia and Medi Mokuena concurring
Tribunal
Researcher:
Ammara Cachalia
For
the merging parties: Vani
Chetty of Baker & McKenzie
For
the Commission:
Prishani Maheeph
[1]
See
inter
alia
page
9 of the merger record.