competltlon tribunal , .. '~ ~,,.,,.
COMPETITION TRIBUNAL OF SOUTH AFRICA
In the matter between :
Accelerate Property Fund Limited
and
Laritza Investments No 183 Proprietary Limited
in relation to Eden Meander Lifestyle Centre
Case No: LM054Jul16
Primary Acquiring Firm
Primary Target Firm
Panel : Norman Manoim (Presiding Member)
: lmraan Valodia (Tribunal Member)
Heard on
Order Issued on
Reasons Issued on
Approval
: Andiswa Ndoni (Tribunal Member)
: 04 August 2016
: 04 August 2016
: 12 August 2016
Reasons for Decision
[ 1 ] On 04 August 2016, the Competition Tribuna l rTribunal ") approved without conditions
the large merger between Accelerate Property Fund Limited and Laritza Investments
No 183 Proprietary Limited in relation to Eden Meander Lifestyle Centre.
[ 2] The reasons for approving the proposed transaction follow .
Parties to the transaction
Primary acquiring firm
[ 3 ] The primary acquiring firm is Accelerate Property Fund Limited ("Accelerate"), a
company incorporated in accordance with the laws of the Republic of South Africa.
Accelerate is listed on the Johannesburg Stock Exchange and as such is not
controlled by any firm.
[ 4] Accelerate controls Park.town Crescent properties (Pty) Ltd ("PCP") which in turn
controls Wanooka Properties (Pty) Ltd ("Wanooka").
[ 5 ] Accelerate and its subsidiaries will collectively be referred to as the "Acquiring Group".
[ 6] The Acquiring Group is a property owning company with a diverse property portfolio
comprising of retail, commercial/office and industrial/warehouse space located in the
Gauteng, Western Cape, Limpopo and Kwa-Zulu Natal provinces.
[ 7 ] Of relevance to the proposed transaction are Accelerate's retail properties located in
the Western Cape Province.
Primary target firm
[ 8] The primary target firm is Laritza Investments No 183 Proprietary Limited ("Laritza")
in relation to Eden Meander Lifestyle Centre ("Target Centre"). The Target Centre is
wholly owned by Laritza.
Proposed transaction and rationale
[ 9] Accelerate intends to acquire the Target Centre from Laritza. Upon implementation of
the proposed transaction, Accelerate will own and control the Target Centre.
[ 10] Accelerate submits that the proposed transaction is consistent with its strategy of
building a quality property portfolio. The proposed transaction represents an
opportunity for Accelerate to amongst other things further increase its portfolio
weighting within the retail sector and improve its geographical spread in the Western
Cape with the addition of an A grade shopping centre within an established retail node.
[ 11 ] Laritza's rationale for disposing of the Target Centre is that it is a developer of
properties such as retail shopping centres and is not a property asset manager.
Impact on competition
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[ 12 ] The Commission considered the activities of the merging parties and found that the
proposed transaction presents an overlap in the broad market for the provision of
rentable space in retail property in the Western Cape.
[ 13] The Target Centre is located approximately 400km away from the Acquiring Group's
nearest retail properties in the Western Cape Province.
[ 14] In light of the above, the Commission therefore concluded that the proposed
transaction was unlikely to substantially prevent or lessen competition in any relevant
market.
[ 15 ] 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
[ 16] Laritza has four employees. Two will be redeployed elsewhere in the Group. Whilst
two other management employees will be retrenched, this small number of
retrenchments would not in our view suffice to constitute a "substantial public interest"
the threshold test for intervention in terms of the Act. We therefore agree with the
Commission that the merger raises no public interest issues.1
[ 17 ] The proposed transaction further did not raise any other public interest concerns .
Conclusion
[ 18] 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.
MrN
raan Valodia and Ms Andiswa Ndoni concurring
12 August 2016
DATE
1 The Commission also agreed that no public interest issue arose from the retrenchment but decided
the issue because of the seniority of the employees.
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Tribunal Researcher: Karissa Moothoo Padayachie
For the merging parties: Glyn Marais
For the Commission: Billy Mabatamela
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