It
competitiontribunal
SOU TH AFRICA
COMPETITION TRIBUNAL OF SOUTH AFRICA
In the matter between:
Amdec Investments Proprietary Limited
And
Westbrook Residential Development Proprietary Limited
Panel
Heard on
Order issued on
Reasons issued on
APPROVAL
: E Daniels (Presiding Member)
: A Wessels (Tribunal Member)
: I Valodia (Tribunal Member}
: 31 March 2020
: 31 March 2020
: 08 April 2020
REASONS FOR DECISION
Case No: LM165Mar20
Primary Acquiring Firm
Primary Target Firm
[1] On 31 March 2020, the Competition Tribunal ("Tribunal") unconditionally
approved the proposed transaction between Amdec Investments Proprietary
Limited ("Amdec") and Westbrook Residential Development Proprietary Limited
(Westbrook").
[2] The reasons for the approval follow.
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PARTIES TO THE TRANSACTION
Primary Acquiring Firms
[3] The primary acquiring firm is Amdec, a private company incorporated in
accordance with the laws of the Republic of South Africa. Amdec is jointly
controlled by the Baker Family Trust and the Rowe Family Trust.
[4] Amdec controls several firms which include Amdec Property Service
Proprietary Limited; Evergreen Retirement Holdings Proprietary Limited;
Amdec Property Developments Proprietary Limited; and Amdec Residential
Developments Proprietary Limited, amongst others.
[5] Amdec, the Baker Family Trust, the Rowe Family Trust and all firms controlled
by them will collectively be referred to as the "Acquiring Group".
[6] The Acquiring Group's South African footprint consists of developments and
real estate brands which includes mixed-used precincts, inclusionary housing,
retirement villages and secure lifestyle and residential estates.
Primary Target Firm
[7] The primary target firm is Westbrook, a private company incorporated in
accordance with the laws of the Republic of South Africa. Pre-merger, Amdec
held 71.43% in Westbrook while the remaining 28.57% was held by Absa Bank
Limited ("Absa Bank"), through its Corporate and Investment Banking division.
Absa Bank is controlled by Absa Group Limited, a company listed on the
Securities Exchange. Westbrook does not directly or indirectly control any firms.
[8] Westbrook owns and holds immovable property and letting enterprises for
investment purposes. Westbrook only has interest in plots located in Parons
Vlei, Port Elizabeth, Eastern Cape ("Westbrook Property").
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PROPOSED TRANSACTION
[9] In terms of the proposed transaction, Amdec intends to acquire the remaining
28.57% shares in Westbrook from Absa Bank. Upon implementation of the
merger, Amdec will wholly own and control Westbrook.
COMPETITON ANALYSIS
[1 O] The Commission considered the activities of the merging parties and found that
the transaction presents a horizontal overlap in the product market with respect
to the provision of residential space and/or property. It is important to note that
there is a distinction between the market for the sale of residential property and
the market for the letting of residential property.
[11] Westbrook Property comprises of residential developments which are strictly
for sale, whereas the Acquiring Group owns residential properties that comprise
both lettable and those for sale. Therefore, the Commission's market analysis
was based on the provision of "for sale" residential property.
[12] In terms of the geographical market, the Commission found no overlaps as the
residential properties are located more than 8 km apart and do not pose a
competitive constraint on each other.
[13] Considering that the proposed transaction does not result in any geographic
overlap, the Commission was of the view that the proposed transaction is
unlikely to result in a substantial prevention or lessening of competition in the
residential property market.
[14] We had no reason to differ with the Commission's findings.
PUBLIC INTEREST
[15] The merging parties submitted that the proposed transaction will not have any
adverse effects on employment and no retrenchments are contemplated as a
result of its implementation. The Commission engaged with employee
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representatives of Amdec and no concerns were raised in respect of the
proposed transaction. Westbrook does not have any employees.
[16] The Commission was therefore satisfied with the merging parties' submission
and was of the view that the proposed transaction is unlikely to raise any
employment concerns.
[17] No other public interest concerns were raised.
CONCLUSION
[18] In light of the above, we were of the view that the proposed transaction is
unlikely to result in a substantial lessening or prevention of competition in any
market. In addition, the proposed transaction raises no public interest concerns.
[19] We accordingly approved the proposed transaction without conditions.
~
Mr Enver Daniels
08 April 2020
Date
Mr Andreas Wessels and Prof. lmraan Valodia
Tribunal Case Manager
For the merging parties
For the Commission
: Lumkisa Jordaan
: Nazeera Mia and Preanka Gounden for Cliffe
Dekker Hofmeyr
: Reabetswe Molotsi and Thabelo Masithulela
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