competft/on tribunal ' .. , .. ,,,~.
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: LM020Apr17
In the matter between:
Vandanex (Pty) Ltd Acquiring Firm
and
13 Immovable Properties and Retail Rental Enterprises
Owned by Jarrabilla Investments (Pty) Ltd Target Firm
Panel
Heard on
Order Issued on
Reasons Issued on
Approval
: Yasmin Carrim (Presiding Member)
: Fiona Tregenna (Tribunal Member)
: Enver Daniels (Tribunal Member
: 21 June 2017
: 21 June 2017
: 13 July 2017
Reasons for Decision
[1] On 21 June 2017, the Competition Tribunal (''Tribunal") unconditionally approved
the proposed transaction between Vandanex (Pty) Ltd ("Vandanex") and the 13
immovable properties and retail rental enterprises ("the Target Properties")
owned by Jarrabilla Investments (Pty) Ltd ("Jarrabilla").
[2] The reasons for approving the proposed transaction follow.
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Parties to the Proposed Transaction
Primary Acquiring Firm
[3] The primary acquiring firm is Vandanex, a firm incorporated in accordance with
the laws of the Republic of South Africa and is controlled by Mabe Investments
(Pty) Ltd ("Mabe"). Mabe is ultimately controlled by the Moolman Group.1 The
Moolman Group has controlling interests in a number of firms. The Moolman
Group, Mabe and Vandanex are collectively referred to as the "Acquiring Group".
[4] The Acquiring Group owns a portfolio of investment properties, comprising of
retail, industrial, office and other properties as well as vacant properties which
are held for future development.
Primary Target Firm
[5] The Target Properties consist of thirteen immovable properties and retail rental
enterprises which are currently owned by Jarrabilla. Jarrabilla is a firm
incorporated in accordance with the laws of the Republic of South Africa and is
presently wholly owned and controlled by Dipula Income Fund Limited
("Dipula").2
Proposed Transaction and Rationale
[6] Vandanex will acquire a direct 100% interest in each of the target properties from
Jarrabilla and will control the target properties post-transaction.
[7] According to the merging parties, the proposed transaction forms part of the
Acquiring Group's investment strategy and is part of Jarabilla's portfolio
rebalancing strategy.
1 The Moolman Group is made up of three related family trusts .
2 Transcript 21 June 2017 at page 8.
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Relevant Market and Impact on Competition
[8] The Commission found a horizontal overlap in the provision of rentable space
in convenience centres3 located within a 1 O km radius in the Vryburg,
Kimberley, Nelspruit and Polokwane areas. It analysed these as four separate
markets.
[9] In respect of market share estimates provided by the merging parties, the
Commission found that the merged entity would have less than 17% in each of
the relevant markets with market share accretions of less than 2% in each.
Furthermore, the merged entity will continue to face competition from other
players, including PAM Golding (Pty) Ltd, Resilient Property Income Fund,
Redefine Properties Limited and Vukile Property Fund.
[1 O] The Commission was therefore of the view that the proposed transaction is
unlikely to substantially prevent or Jessen competition in any of the relevant
markets.
[11] At the hearing the Tribunal noted the neutral impact the proposed transaction
would have on both competition and public interest. This is because, in May
2017, the Acquiring Group held a 20% share in Jarrabilla and its underlying
Target Properties, and managed these properties.4 The remaining 80% was held
by Dipula. Dipula has subsequently acquired the 20% interest in Jarrabilla from
the Acquiring Group and, in terms of this proposed transaction, Jarrabilla will sell
the Target Properties to the Acquiring Group.5
[12] Based on the above, we concurred with the Commission's finding that the
proposed transaction is unlikely to substantially prevent or lessen competition in
any of the relevant markets.
3 Convenience centres include local convenience centres , community centres, neighbourhood centres
and other smaller centres , all of which are considered to provide a competitive constraint on each
other.
4 Transcript 21 June 2017 at page 21.
5 Ibid.
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Public Interest
[13] The merging parties confirmed that the proposed transaction will not negatively
affect employment since the merging parties do not have any employees.6
[14] The Commission was of the view that the proposed transaction is unlikely to raise
concerns on any other public interest grounds.
Conclusion
[15] In light of the above, we concluded 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 approved the proposed
transaction unconditionally.
Ms Yasmin Carrim
13 July 2017
DATE
Prof. Fiona Tregenna and Mr Enver Daniels concurring
Tribunal Researcher:
For the merging parties:
For the Commission:
6 Page 47~ of the Merger Record .
Hayley Lyle
Albert Aukema of Cliffe Dekker Hofmeyr
Simphiwe Gumede
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