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[2016] ZACT 35
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Government Employees Pension Fund c/o Public Investment Corporation Soc Limited v Six (6) Immovable Properties and Rental Enterprises (LM246Mar16) [2016] ZACT 35 (20 April 2016)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: LM246Mar16
In
the matter between:
GOVERNMENT
EMPLOYEES PENSION FUND C/O
PUBLIC
I
NVESTMENT
CORPORATION SOC
LIMITED
Primary Acquiring
Firm
and
THE
SIX (6) IMMOVABLE PROPERTIES
AND
RENTAL
ENTERPRISES
Primary Target Firm
Panel
: Yasmin Carrim (Presiding Member)
: Anton A. Roskam
(Tribunal Member)
: Andiswa Ndoni (Tribunal
Member)
Heard
on
: 22 March 2016
Order
Issued on
: 22 March 2016
Reasons
Issued on
: 20 April 2016
Reasons
for Decision
Approval
[1]
On 22 March 2016, the Competition Tribunal (“Tribunal")
approved the proposed transaction between Government Employees
Pension Fund C/O Public Investment Corporation SOC Limited
and the Six (6) Immovable
Properties
and Rental Enterprises.
[2]
The reasons for approving the proposed transaction follow.
Parties
to proposed transaction
Primary
acquiring
firms
[3]
The primary acquiring firm is the Government Employees Pension Fund
("GEPF"), a pension fund registered in terms of
the laws of
the Republic of South Africa, under the Government Employee Pension
Law 21 of 1996, as amended.
[4]
GEPF manages and administers pensions and other benefits for
government employees. It is a statutory entity and is not controlled
by any firm as envisaged in the Competition Act No.89 of 1998 ("the
Act").
[5]
GEPF is duly represented by the Public Investment Corporation SOC Ltd
("PIG"), a public company established in terms
of Public
Investment Corporation Act 23 of 2004.The PIG acts as an investment
portfolio manager for the GEPF.
Primary
target firms
[6]
The target properties are 6 letting enterprises comprising, Central
City Shopping Centre ("Central City"); Eden Square
Shopping
Centre ("Eden Square"); Temba City Shopping Centre ("Temba
City"); Ga-Rankuwa City Shopping Centre
("Ga-Rankuwa
City"); and Madeira Plaza ("Madeira Plaza").
[7]
These 6 retail properties are controlled by Community Property
Company ("CPC") and Tembisa Plaza Share Block
(Ply) Ltd
("TPS") which are ultimately controlled by Old Mutual Group
Holdings (SA) (Pty) Ltd ("OMSA").
[8]
The target properties are all retail properties comprising of four
community centres, a minor regional centre as well as a neighbourhood
centre. These are located in the Gauteng, Limpopo, and Eastern Cape
provinces.
Proposed
transaction
and
rationale
[9]
GEPF intends to acquire a 100% undivided share in each of the target
properties. Upon completion of the proposed transaction,
GEPF will
exercise sole control over the target properties.
[10]
The merging parties submit that the proposed transaction forms part
of an agreement between Old Mutual Life Assurance Company
(South
Africa) Limited ("OMLACSA") and CPC, TPS and GEPF to settle
a policy benefit that has become due to the GEPF,
partly through cash
and through the sale of the target properties to the GEPF.
Impact
on
competition
[11]
During its investigation the Commission found that the activities of
the acquiring firm did not overlap in the Limpopo and
Eastern Cape
provinces, given that GEPF does not own any retail property in these
regions. As such, the Commission did not assess
these markets
further.
[12]
However, the Commission found that the proposed transaction presented
a potential overlap in the provision of rentable retail
properties in
Pretoria and surrounding areas, where Central City (a minor regional
centre) and Ga-Rankuwa (a community centre)
are situated.
[13]
In assessing the relevant market, the Commission sought to compare
the property portfolios of the acquiring firm and the target
properties. It found that the acquiring firm's portfolio comprised
neighbourhood centres, convenience centres, a community centre
and a
super-regional centre in Pretoria. Therefore when applying a strict
retail property classification, the Commission was of
the view that
there would be no overlap in the merging parties' properties, given
that Central City is classified as a minor regional
centre and
constituted a distinct product market from all other properties owned
by the acquiring firm.
[14]
In relation to the community centres, the Commission noted that while
these shared the same classification, when following
the approach
adopted in Hyprop/Attfund
[1]
,
the nearest comparative centre to the acquiring firm (i.e. the
Jacaranda Shopping centre, a community centre) was
more than
34km away from the target properties (i.e. Ga Rankuwa) resulting
in no overlap.
[15]
The Commission therefore concluded that the proposed transaction was
unlikely to substantially prevent or lessen competition.
[16]
We concur with the Commission's conclusion that
the proposed transaction is unlikely
to
substantially prevent or lessen competition in any relevant market.
Public
Interest
[17]
The
merging
parties
confirmed
that
the
proposed
transaction
will
not
result
in any
adverse impact on employment. The employees managing the target
properties will remain unchanged.
[2]
[18]
The proposed transaction further raised no other public interest
concerns.
Conclusion
[19]
In light of the above, we concluded that the proposed transaction is
unlikely to substantially prevent or lessen competition
in any
relevant market. In addition, no other public interest issues arise
from the proposed transaction. Accordingly, we the proposed
transaction unconditionally.
20
April
2016
DATE
_________________________
Ms
Yasmin Carrim
Mr
Anton A. Roskam and Ms Andiswa Ndoni concurring
Tribunal
Researcher:
Aneesa Ravat
For
the merging parties:
Nazeera Mia from Cliffe Dekker Hofmeyr and Helgaard von
Holtzhausen
legal counsel for PIC.
For
the Commission:
Maanda Lambani
[1]
Tribunal Case No. 05/LM/Jan11
[2]
Transcript 22 March 2016, page 5