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[2020] ZACT 4
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Emerging African Property Partners (Pty) Ltd v Lisaline Investment Holdings (Pty) Ltd (LM124Oct19) [2020] ZACT 4; [2020] 1 CPLR 348 (CT) (10 January 2020)
Competition
tribunal
SOUTH
AFRICA
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: LM124Oct19
In
the matter between
Emerging
African Property Partners (Pty)
Ltd
Primary Acquiring Firm
And
Lisaline
Investment Holdings (Pty)
Ltd
Primary Target Firm
Panel:
Mr E Daniels (Presiding Member)
:
Ms Y Carrim (Tribunal Member)
:
Ms A Ndoni (Tribunal Member)
Heard
on: 11 December 2019
Order
Issued on: 11 December 2019
Reasons
Issued on: 10 January 2020
REASONS
FOR DECISION
Approval
[1]
On 11 December 2019, the Tribunal unconditionally approved the
proposed transaction in terms of which Emerging African Property
Partners (Pty) Ltd (EAPP) is acquiring control over Lisaline
Investment Holdings (Pty) Ltd (Lisaline Holdings).
[2]
The reasons for the approval of the proposed transaction
follow.
Parties
to the transaction
[3]
The primary acquiring firm, EAPP is a new company that was
established with the mandate of investing in sale and leaseback
transactions
where the focus is on industrial properties. EAPP is
jointly controlled by the Government Employee Pension Fund (GEPF), an
Emerging
African Property Holdings (Pty) Ltd (EAPH). Apart from EAPP,
GEPF· holds interests in several property firms. EAHP also
controls several property firms.
[4]
GEPF, EAHP, and all the firms they directly and indirectly
control will be collectively referred to as the "Acquiring
group".
Of relevance for merger assessment is the Acquiring
group's industrial property interests, through the GEPF, in Gauteng
and KwaZulu-Natal.
[5]
The primary target firm, Lisaline Holdings is wholly owned by
Enigma Property (Pty) Ltd (Enigma Property). Pre-merger, Usaline
Holdings
and Enigma Property jointly control Lisaline (Pty) Ltd
(Lisaline). As a preliminary step of the proposed transaction,
Lisaline
Holdings will acquire sole control of Lisaline from Enigma
Property.
[6]
Lisaline's sole activity is owning a large light industrial property
known as Portion 772 of the farm Klipfontein (target property)
which
is situated in Boksburg. The target property has a GLA of 38 674m
2
and comprises of a large warehouse with an auxiliary office block,
workshop, dining and ablution building.
Proposed
transaction and rationale
[7]
EAPP intends to acquire 90% of the issued shares in and loan
claim against Lisaline. Holdings from Enigma Property. Post-merger,
EAPP will acquire sole control of Lisaline Holdings.
Impact
on competition
[8]
The Commission considered the activities of the merging
parties and found a product overlap because both the merging parties
are
active in the provision of rentable light industrial property.
The Commission however, concluded that the proposed transaction does
not present a geographic overlap because the Acquiring group's
industrial property is .located approximately 53km away from the
target property; In view of the above, the Commission concluded that
the proposed transaction is unlikely to result in a substantial
prevention or lessening of competition. We find no reason to disagree
with the Commission.
Public
interest
[9]
There is a pro-public interest benefit resulting from the proposed
transaction. This is because a black owned women-empowerment
property
company will be partnering with the GEPF.
[1]
Lastly, no public interest concerns arise as a result of the proposed
transaction,
Conclusion
[10]
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 approyed the
proposed
transaction unconditionally.
10
January
2020
Date
__________________
Mr
Enver Daniels
Ms
Y Carrim and A Ndoni concurring.
Tribunal
Case Manager: Kgothatso Kgobe
For
the Merging Parties: A Aukema and D Mogapi of Cliffe Dekker Hofmyer
For
the Commission : Y Okharedia and W Gumbie
[1]
Pages 4 and 5 of the Hearing Transcript.