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COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: LM201Jan17
In the matter between
HUAWEI TECHNOLOGIES SOUTH AFRICA (PTY) LTD
And
GROWTHPOINT PROPERTIES LIMITED IN RESPECT OF
HARROWDENE OFFICE PARK
Panel : Ms Mondo Mazwai (Presiding Member)
: Ms Andiswa Ndoni (Tribunal Member)
: Mrs Medi Mokuena (Tribunal Member)
Heard on : 15 February 2016
Order Issued on : 15 February 2016
Reasons Issued on : 15 February 2017
REASONS FOR DECISION
Approval
Acquiring Firm
Target Firm
[1] On 15 February 2017, the Competition Tribunal ('Tribunal') approved the
transaction between Huawei Technologies South Africa (Pty) ltd ('Huawei SA')
and Growthpoint Properties ltd ('Growthpoint') in respect of Harrowdene Office
Park ('Harrowdene').
[2] The reasons for the approval follow.
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Parties to the transaction and their activities
Primary Acquiring Firm
[3] The primary acquiring firm is Huawei SA, a company incorporated in
accordance with the laws of the Republic of South Africa which controls no
other firm.
[4] Huawei SA is a wholly owned subsidiary of Huawei Technologies (Netherlands)
B.V ('Huawei BV'). Huawei B.V is not controlled by any firm and controls only
one other firm active in South Africa, Huawei Technologies Africa (Pty) Ltd
('Huawei Africa').
[5] Huawei SA acts as Huawei BV's regional business for the Southern African
region, providing platform support, such as management guidelines in relation
to policies and operations, to other Huawei entities in the region.
[6] Huawei B.V offers telecomm operators, enterprises and consumer solutions
and services in the Information and Communications technology sector.
Huawei SA provides products and solutions to mobile network operators,
businesses as well as consumers across the full information technology
spectrum. Huawei SA does not own any property letting enterprises from which
it derives income in South Africa.
Primary Target Firms
[7] The primary target property is Harrowdene, currently owned by Growthpoint.
Harrowdene office park is classified as Grade A Office Space located in
Woodmead in the Gauteng province.1
1 128 Western Service road Woodmead , Johannesburg .
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Proposed transaction and rationale
[B] In terms of the Sale of Letting Enterprise Agreement ('Sale Agreement') Huawei
SA intends to acquire Harrowdene Office Park (comprising immovable
property, buildings, leases and contracts) from Growthpoint. Upon the
implementation of the transaction Huawei SA will own Harrowdene Office Park
together with the existing lease agreements concluded between Growthpoint
and various tenants which occupy the property.
[9] Upon expiry of the leases, Huawei will use Harrowdene office park as its head
office and does not intend to operate the property as a property letting
enterprise from which to derive rental income.
[101 In terms of rationale, Huawei SA submits that it has outgrown its current leased
properties and the target property has been identified as suitable property from
which to centralise its operations and establish a local brand image reflecting
its commitment to the South African market.
(11] Growthpoint submits that the proposed transaction is an attractive offer which
allows for the realisation of investment in relation to the property.
Relevant market and impact on competition
[12] The Commission found that the proposed transaction does not result in any
horizontal overlaps as Huawei SA does not own any Grade A office properties
in the Republic of South Africa.
Public interest
(13] The merging parties submitted, which was confirmed by the Commission, that
the proposed transaction will not have a negative public interest effects.2
2 Page 51 of the Merger record, page 9 of the Comm ission's recommenda tions.
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Conclusion
[14] 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 issued arise from the proposed transaction. Accordingly, we
approve the proposed transaction unconditionally.
Ms Andiswa Ndoni and Mrs Medi Mokuea
Tribunal Researcher: Alistair Dey-van Heerden
For the Merging Parties Vani Chetty of Baker McKenzie
For the Commission: Amanda Mfuphi
15 February 2017
Date
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