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[2016] ZACT 42
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Vukile Property Fund Limited v SA Retail Properties (Proprietary) Limited ; In respect of the enterprise known as Pinecrest Centre (LM256Mar16) [2016] ZACT 42 (11 May 2016)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No:
LM256Mar16
In
the matter between:
VUKILE
PROPERTY
FUND
LIMITED
Primary Acquiring Firm
and
SA
RETAIL PROPERTIES (PROPRIETARY) LIMITED
Primary
Target Firm
IN
RESPECT OF THE ENTERPRISE KNOWN AS
PINECREST
CENTRE
Panel
: Andreas Wessels (Presiding Member)
:
Medi Mokuena (Tribunal Member)
:
Andiswa Ndoni (Tribunal Member)
Heard
on :
13 April 2016
Order
Issued on :
13 April 2016
Reasons
Issued on :
11 May 2016
Reasons
for Decision
Approval
[1]
On 13 April 2016, the Competition Tribunal ("Tribunal")
approved the proposed transaction between Vukile Property
Fund
Limited and SA Retail Properties (Proprietary) Limited in respect of
the enterprise known as Pinecrest Centre.
[2]
The reasons for approving the proposed transaction follow.
Parties
to proposed transaction
Primary
acquiring firm
[3]
The primary acquiring firm is Vukile Property Fund Limited
("Vukile"), a public company registered in accordance with
the laws of the Republic of South Africa.
[4]
Vukile is a property fund, which is listed on the Johannesburg
Securities Exchange (JSE). Vukile's property portfolio comprises
of
retail and office space as well as land under development.
[5]
Relevant to the current competition analysis is Vukile's retail
properties in the KwaZulu-Natal Province.
Primary
target firm
[6]
The primary target firm is SA Retail Properties (Proprietary) Limited
("SA Retail Properties") in respect of an undivided
half
share of the enterprise known as Pinecrest Centre (hereinafter
referred to as "the target property").
[7]
Pre-merger Vukile owns an undivided half share in the target
property.
[8]
Pinecrest Centre is classified as a minor regional centre and is
located in Pinetown in KwaZulu-Natal.
Proposed
transaction and rationale
[9]
Vukile intends to acquire an interest equivalent to an undivided half
share of the target property which will give Vukile sole
control over
the target property post transaction.
[10]
Vukile considers the target property as well located with anticipated
increased future trading.
[11]
SA Retail Properties wishes to dispose of the target property.
Impact
on competition
[12]
The Commission found that there is no horizontal overlap between the
target property and the properties owned by Vukile in
KwaZulu-Natal.
[13]
From a vertical perspective, the Commission noted that the target
property is currently managed by Broll Properties Group Ply
Ltd
("Broll") and that Vukile has capabilities to render
property management services. The merging parties however confirmed
that Broll will continue to manage the target property post-merger.
The Commission thus concluded that the proposed transaction
raises no
significant vertical concerns.
[14]
Given the above, the Commission concluded that the proposed
transaction is unlikely to substantially prevent or lessen
competition
in any relevant market. We concur with this finding.
Public
interest
[15]
The merging parties
confirmed
that
the
proposed
transaction
will not
result
in
any adverse
impact
on
employment.
[1]
The
proposed
transaction
further
raises no
other
public
interest
concerns.
Conclusion
[16]
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
11
May 2016
DATE
______________________________
Mr
Andreas Wessels
Ms
Medi Mokuena and Ms Andiswa Ndoni concurring
Tribunal
Researcher:
Busisiwe Masina
For
the merging parties:
Albert Aukema of Cliffe Dekker Hofmeyr
For
the Commission:
Maanda Lambani
[1]
Merger
record,
pages
8
and
50.