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[2018] ZACT 6
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Ivlyn No 2 (Pty) Ltd (2016/360925/07) v The retail letting enterprise conducted in respect of the Valley View Retail Centre (LM246Nov17) [2018] ZACT 6 (10 January 2018)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: LM246Nov17
In
the matter between
lvlyn
No 2 (Pty) Ltd
(2016/360925/07)
Primary Acquiring Firm
And
The
retail letting enterprise conducted
in
Primary Target Firm
respect
of the Valley View Retail Centre
Panel
: Mr N Manoim (Presiding Member)
: Mr AW Wessels (Tribunal Member)
: Mrs M Mokuena (Tribunal Member)
Heard on
: 10 January 2018
Order Issued on
: 10 January 2018
Reasons Issued on
: 26 January 2018
REASONS
FOR DECISION
Approval
[1]
On
10 January 2018, the Competition Tribunal ("Tribunal")
unconditionally approved the large merger between lvlyn No 2
(Pty)
Ltd ("lvlyn No 2") and the retail letting enterprise
conducted in respect of the Valley View Retail Centre ("Target
property"), hereinafter collectively referred to as the merging
parties.
[2]
The
reasons for the approval follow.
Primary
Acquiring Firm
[3]
lvlyn
No 2 is a company incorporated specifically for the proposed
transaction and currently does not conduct any business. lvlyn
No 2
is ultimately controlled by the trustees of the Saltzman Family
Trust. lvlyn No 2 and its controllers are hereafter referred
to as
the 'Acquiring group'.
[4]
The
Acquiring group is an investment holding entity that is indirectly
active in the provision of products and services through
its many
subsidiaries, primarily Dis Chem Pharmacies Limited
(uDis-Chem"). Furthermore, the Acquiring Group also directly
and
indirectly controls various property-owning companies that own
residential, retail, warehouse and office property located in
Gauteng, Eastern Cape, Western Cape, Mpumalanga and KwaZulu-Natal.
[5]
Of
relevance to the proposed transaction is the Acquiring group's five
properties located in Gauteng.
Primary
Target Firm
[6]
The
Target property is a retail letting business that is classified as a
retail convenience centre located in Noordheuwel, Krugersdorp
in
Gauteng. Marssen 8 (Pty) Ltd ("Marssen") holds a 50%
undivided share interest in the Target property and the other
50% is
held by Benflat Properties (Pty) Ltd ( “Benflat".)
Proposed
transaction and rationale
[7]
lvlyn
No 2 intends to acquire the undivided 50% issued share capital in the
Target property from Marssen. Post-merger, lvlyn No
2 and Benflat
will exercise joint control over the Target property.
[8]
Both
parties engage in the business of providing rentable retail space.
However they do not compete in the same geographic market
as the
Target property is located 21kms from the nearest of the Acquiring
group's retail properties. There are various convenience
centres such
as Key West Shopping Centre, Cradlestone Mall and Anthos Centre,
located near the Target property that will continue
to constrain the
merging parties post-merger.
[9]
We
enquired whether the merger might constrain any other pharmacy
business from letting premises in the Target property in the future,
given the acquiring firm's interest in Dis-Chem. The merging parties
clarified that even though Dis-Chem was the only pharmaceutical
products retailer in the Target property, neither Dis-Chem nor the
Acquiring group would preclude the entry of any other retail
pharmacy
in the Target property.
[10] The proposed
transaction thus does not alter the pre-merger status
quo.
Public
interest
[11]
The
merging parties submitted that proposed transaction is unlikely to
have any adverse effects on employment as the merging parties
do not
have any employees. From the above, the Commission was of the view
that the proposed transaction is unlikely to negatively
affect
employment and does not raise any other public interest concerns. We
agreed.
[12]
In
light of the above, we concluded that the proposed transaction is
unlikely to substantially prevent or lessen competition in
any
relevant market. In addition, no adverse public interest issues arise
from the proposed transaction. Accordingly, we approved
the proposed
transaction unconditionally.
Mr
Norman Manoim
26
January 2018 Date
Mr
Andreas Wessels and Mrs Medi Mokuena concurring.
Tribunal
Case Manager :
Ndumiso Ndlovu.
For
the Merging Parties : M
Rheeder of Saltzman Attorneys.
For
the Commission
:
N
Msiza
and Z Hadebe.