competition tribunal
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COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: LM184Dec16
In the matter between:
AMDECINVESTMENTS(PTY)LTD Primary Acquiring Firm
and
CULEMBORG INVESTMENT PROPERTIES (PTY) LTD Primary Target Firm
Panel
Heard on
Order Issued on
Reasons Issued on
Approval
: Norman Manoim (Presiding Member)
: AW Wessels (Tribunal Member)
: Andiswa Ndoni (Tribunal Member)
: 18 January 2017
: 18 January 2017
: 26 January 2017
Reasons for Decision
[1] On 18 January 2017, the Competition Tribunal ("Tribunal") approved the proposed
transaction between Amdec Investments (Pty) Ltd and Culemborg Investment
Properties (Pty) Ltd.
[2] The reasons for approving the proposed transaction follow.
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Parties to proposed transaction
Primary acquiring firm
[3] The primary acquiring firm is Amdec Investments (Pty) Ltd ("Amdec"), a company
incorporated in accordance with the laws of the Republic of South Africa.
[4] Amdec is jointly controlled in equal share by the Rowe Family Trust and the Baker
Family Trust. Amdec controls a number of firms including: Amdec Property
Investments, Amdec Residential Developments, Arch Property Fund Limited, Belle
Woode Retirement Village Property Development, Dormell Properties 193, Evergreen
Lifestyle Villages, Evergreen Property Investments, and Fisherman's Village Holiday
Accommodation.
[5] The Rowe Family Trust, the Baker Family Trust and all their subsidiaries, including
Amdec will be referred to as the "Amdec Group".
[6] The Amdec Group is a privately owned property development and investment business
that owns a portfolio of properties and property letting enterprises which are active in
the property development sphere in South Africa.
Primary target firm
[7] The primary target firm is Culemborg Investment Properties (Pty) Ltd ("Culemborg"), a
company incorporated in accordance with the laws of the Republic of South Africa.
[8] Culemborg is jointly controlled by Absa Bank Limited (67%) and Amdec (33% ). Further1
Culemborg does not control any firm.
[9] Culemborg is a speciality retail property letting enterprise. This speciality retail property
is let to several tenants who operate motor dealerships.
Proposed transaction
[1 OJ In terms of the proposed transaction, Amdec intends to increase its shareholding in
Culemborg from 33% to 100% by acquiring an additional 67% shareholding held by
Absa. Upon the implementation of the transaction, Amdec will control Culemborg.
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Rationale
Primary acquiring firm
[11] Amdec intends to develop the site into a mixed usage development. Amdec currently
owns the Melrose Arch property in Johannesburg which is a mixed use development.
Primary target firm
[12] The Barclays Africa Group wishes to reduce its exposure to property investments. In
2015 it had acquired an increased stake in Culemborg. Asked at the hearing why it
was reducing this stake only a year later, we were informed that the Group had planned
to use the site for its head office in the Cape but had since decided on another site so
the property no longer had strategic value for it.
Impact on competition
[13) The Commission considered the activities of the merging parties and found that there
was no overlap in the activities of the merging parties. The transaction does not change
the structure of any market as there will be no accretion in market shares.
[14] The Commission was therefore of the view that the proposed transaction is unlikely to
substantially prevent or lessen competition in any market.
[15] The only properties that Amdec has leased to motor dealerships are located at Melrose
Arch in Johannesburg. They therefore cannot be considered to be competitive with
those of Culemborg. Amdec further confirmed that while it had other property interests
in the Western Cape, none of those interests were leased to motor dealerships. 1
Public interest
[16] The merging parties submitted that the proposed transaction will have no adverse
effect on employment as the target firm does not have any employees.2
[17] The Commission was of the view that the proposed transaction is unlikely to raise
concerns on any other public interest grounds.
1 This was confirmed at the hearing. See transcript page 3, lines 19 - 21; page 4, lines 1-14.
1 Inter alia Commission's Recommendation page 9.
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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 or raise any adverse
public interest issues. Accordingly, we approve the proposed transaction
unconditionally.
Mr AW Wessels and Ms Andiswa Ndoni concurring
Case Manager: Kameel Pancham
For the merging parties: Vani Chetty of Baker McKenzie
For the Commission: Zintle Siyo
26 January 2017
DATE
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