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[2016] ZACT 81
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Rebosis Property Fund Limited v Billion Group Proprietary Limited (LM053JUL16) [2016] ZACT 81 (7 September 2016)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No:LM053Jul16
In
the matter between:
Rebosis
Property
Fund
Limited
Primary Acquiring Firm
and
Billion
Group Proprietary Limited in respect of:
Primary
Target
Firms
•
Billion
Property
Developments
Proprietary
Limited
•
Bay
West
City
Proprietary
Limited
•
Billion Asset
Managers
Proprietary
Limited
•
Billion
Property Services
Proprietary
Limited
Panel
: AW Wessels (Presiding Member)
: Medi Mokuena (Tribunal
Member) Andiswa
:Ndoni
(Tribunal Member)
Heard
on
: 31 August 2016
Order
Issued on
:
31 August 2016
Reasons
Issued on
: 07 September 2016
Reasons
for Decision
Approval
[
1 ] On 31 August 2016, the Competition Tribunal ('Tribunal")
unconditionally approved the large merger between Rebosis Property
Fund Limited ("Rebosis") and Billion Group Proprietary
Limited ("Billion Group") in respect of Billion Property
Developments Proprietary Limited ("Billion Property
Developments"), Bay West City Proprietary Limited ("Bay
West
City"), Billion Asset Managers Proprietary
Limited ("Billion Asset Mangers")
and Billion Property Services Proprietary Limited
("Billion Property Services").
[
2 ] The reasons for approving the proposed transaction follow.
Parties
to transaction
Primary
acquiring firm
[
3 ] The primary acquiring firm is Rebosis, a real estate investment
trust listed on the Johannesburg Securities Exchange. Rebosis
is not
controlled by any single firm but controls a number of firms in South
Africa.
[
4 ] Rebosis' property portfolio comprises of office, retail and
industrial properties located throughout South Africa. Of
relevance
to the competition assessment of the proposed transaction are
Rebosis' properties located in Gauteng and in the Eastern
Cape.
Primary
target firms
[
5 ] The primary target firms are the following enterprises:
•
Billion Property
Developments;
•
Bay West City;
•
Billion Asset Managers;
and
•
Billion Property Services
(collectively referred to as the "Target Firms").
[
6 ] The Target Firms are controlled by Billion Group which in turn is
controlled by the Amatolo Family Trust.
[
7 ] Of specific relevance to the competition assessment of the
proposed transaction are Billion Property Developments' Forest
Hill
shopping centre located in Centurion in Gauteng, as well as Bay
West City's Baywest Mall located in Port Elizabeth
in the
Eastern Cape Province.
Proposed
transaction
and
rationale
[
8 ] Rebosis intends to acquire the entire issued share capital of the
Target Firms from Billion Group. Upon implementation of
the proposed
transaction Rebosis will control the Target Firms.
[
9 ] Rebosis submitted that the proposed transaction is in line
with its strategic objective of being a retail-biased fund.
[
10 ] Billion Group submitted that the current transaction will aid it
to unlock and release considerable value through the disposal
of
assets.
Impact
on competition
[
11 ] The Competition Commission ("Commission") identified a
horizontal overlap between the activities of the merging
parties in
the provision of rentable space in comparative centres in
the Eastern Cape and in Gauteng.
[
12 ] In the Eastern Cape, the acquiring group owns two retail
properties located in respectively East London and Mdantsane, whilst
the Baywest Mall (see paragraph 7 above) is located in Port
Elizabeth, which is more than 200 km away from the acquiring group's
properties. The Commission thus concluded that there is no geographic
overlap between the merging parties' comparative centres
in the
Eastern Cape.
[
13 ] In Gauteng, the acquiring group owns comparative centres in
Pretoria and Johannesburg, whereas Forest Hill Mall (see paragraph
7
above) is situated in Centurion, which is approximately 30 km away
from the acquiring group's closest relevant properties. The
Commission therefore found that the merging parties' relevant
properties in Gauteng are unlikely to constrain each other.
[
14 ] In addition, the Commission found that the acquiring group's
comparatives centres situated in Pretoria are constrained by
other
comparative centres such as Brooklyn Mall and Menlyn Mall
amongst others. The Commission also
found
that Forest Hill Mall is
likely to be constrained
by
other comparative centres such as Centurion
Mall, Mall@Reeds and Centurion
Lifestyle.
[
15 ] The Commission furthermore found that even if one were to
consider a hypothetical geographic market of a 30 km radius around
Forest Hill Mall, the post-merger market share of the merging parties
will remain below 15%.
[
16 ] The Commission therefore concluded that the proposed
transaction is unlikely to substantially prevent or
lessen competition in any potential relevant market. We concur
with the Commission's finding.
Public
interest
[
17 ]
The
merging
parties
submitted
that
the
proposed
transaction
will
not
result
in any
adverse
impact on
employment.
[1]
[
18 ] The proposed transaction further raises no other public interest
concerns.
Conclusion
[
19 ] 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.
07
September 2016
DATE
_______________________
Mr
AW Wessels
Ms
Medi Mokuena and Ms Andiswa Ndoni concurring
Tribunal
Case Manager : Caroline Sserufusa
For
the merging parties : Vani Chetty of Baker
and McKenzie
For
the Commission
: Boitumelo Makgabo
[1]
Merger Record,
inter
alia
page
8.