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[2019] ZACT 22
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Government Employees Pension Fund v lsago @N12 Develeopment Proprietary Limited (LM184Sep18) [2019] ZACT 22 (10 January 2019)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No:LM184Sep18
In
the matter between:
The
Government Employees Pension Fund Represented by the Public
Investment Corporation SOC
Limited
Primary
Acquiring Firm
And
lsago
@N12 Develeopment Proprietary Limited in respect of vacant immovable
land comprising: (i) the remainder of Portion 97 of Farm
Palmletfontein No.403 and (ii) the Farm IP No. 564, Registration
Division IP,
North
West Province
Primary
Target Firm
Panel: Yasmin
Carrim (Presiding Member) Mondo Mazwai (Tribunal Member) Fiona
Tregenna (Tribunal Member)
Heard
on: 13
December 2018
Order
Issued on: 13
December 2018
Reasons
Issued on: 10 January 2019
Reasons
for Decision
Approval
[1]
On 13 December 2019, the Competition Tribunal ("Tribunal")
unconditionally approved the transaction
involving Government
Employees Pension Fund represented by the Public Investment
Corporation SOC Limited (PIG) and lsago @N12Development
Proprietary
Limited in respect of vacant immovable land.
[2]
The reasons for approving the proposed transaction follow.
Parties
to the proposed transaction
Primary
acquiring firm
[3]
The primary acquiring firm is The Government Employees Pension Fund,
a juristic entity governed by the Government
Employees Pension Law of
1996, as amended. The GEPF is represented by the Public Investment
Corporation SOC Limited (PIG). The
GEPF is managed by a board of
trustees appointed for a term of four years.
[4]
The GEPF controls several firms including Pareto Limited, V&A
Waterfront Holdings Airports SA Proprietary
Limited and Opiconsivia
Investment 230 Proprietary Limited.
[5]
The GEPF manages and administers pensions and other benefits for
government employees in South Africa. The
GEPF is invested across
various asset classes including: cash and money market, domestic
bonds, domestic property, domestic equity,
African equity, foreign
bonds and foreign equity.
[6]
Of relevance to the proposed transaction are the properties that are
currently owned by the GEPF in North
West Province.
Primary
target firm
[7]
The primary target firms consist of vacant immovable land as follows:
(i) the remainder of Portion 97 of Farm
Palmietfontein No. 403,
Registration Division IP, North West Province, measuring 547,4207 and
(ii) The Farm IP No. 564, Registration
Division IP, North West
Province, measuring 481,2140.
[8]
These target firms shall be collectively referred to as the Target
Properties.
[9]
The Target Properties are wholly controlled by lsago @N12Development
Proprietary Limited (lsago). lsago is
represented by a group of
entrepreneurs with vast experience in property development. It is an
entity established for the acquisition
and development of the subject
property which is located between Klerksdorp and Stilfontein.
[10]
The entity, lsago is currently 74% owned by Anglo Saxon Development
Proprietary Limited which is in turn controlled by
the Karoo Broedery
Trust
[1]
and the remaining 26%
is owned by Moedi Bosele Investors, a local investment company.
Proposed
transaction and rationale
[11]
In terms of the proposed transaction, GEPF intends to acquire a 60%
share of the Target Properties from lsago. The remaining
40% share
owned by lsago will be transferred to a newly incorporated firm,
lsago Holdings.
[2]
Moedi Bosele
will hold a non-controlling 19.5% in the newly incorporated firm
lsago Holdings. The South African Military Veterans
Association (MVA)
will hold a non-controlling 1% in lsago Holdings.
[3]
[12]
The GEPF submitted that the proposed project will result in
developmental impact in the region through job creation during
and
after the construction periods and vital skill transfer will take
place. It must be noted that MVA will utilise some of their
unemployed veterans to be part of future development.
[13]
lsago wishes to grow in the property market and it anticipates that
by partnering with reputable entities (such as the
GEPF), !sago will
be assisted in creating demand for its services in the foreseeable
future.
Impact
on competition
[14]
The Commission considered the activities of the merging parties and
found that the proposed transaction results in an
overlap between the
activities of the merging parties in the provision of office and
residential property as the Target Properties
are zoned for office,
industrial, housing and healthcare property.
[15]
However, the Commission found that none of the GEPF's office and
residential properties are located within a 10 km radius
of the
Target Properties. The Commission found that the GEPF's properties
are located in Mafikeng, Mmabatho and Rustenburg in the
North West
whereas the Target Properties are located in Matlasona (Klerksdorp)
in North West. The GEPF properties are located respectively
170 km,
176 km and 170 km away from the Target Properties.
[16]
The Commission, therefore found that the merging parties' properties
are unlikely to constrain each other as there is
no geographical
overlap between the activities of the merging parties.
[17]
Given the above, the Commission concluded that the proposed
transaction is unlikely to substantially prevent or lessen
competitlon in any relevant market in South Africa.
Public
interest
[18]
The merging parties confirmed that the proposed transaction will have
no adverse effect on employment in South Africa.
[4]
[19]
The proposed transaction further raises no other public interest
concerns.
Conclusion
[20]
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 public interest issues arise from
the proposed transaction. Accordingly, we approved the
proposed
transaction unconditionally.
Ms
Yasmin Carrim
Ms
Mondo Mazwai and Prof Fiona Tregenna concurring
Tribunal
Case Manager: Ms Busisiwe Masina
For
the merging parties: Mr Wade Graaff of ENS Africa
For
the Commission: Ms
Nolubabalo Myoli
[1]
The Trust is controlled by Doreen and Una Marie Crause.
[2]
This newly incorporated firm will be controlled by Anglo Saxon,
which is the current controller of lsago.
[3]
GEPF will not be acquiring any shareholding or control in lsago or
lsago Holdings.
[4]
Merger Record, pages 17.