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[2020] ZACT 50
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RMB Investments and Advisory (Pty) Ltd and Another v Trustees for the time being of Truzen 89 Trust in respect of the property letting enterprise known as Mall of the South (LM145Oct20) [2020] ZACT 50 (10 December 2020)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: LM145Oct20
In
the matter between:
RMB
Investments and Advisory (Pty) Ltd and
Redefine
Properties
Limited
Primary
Acquiring Firm(s)
and
The
Trustees for the time being of Truzen 89
Trust
Primary Target Firm
in
respect of the property letting enterprise known
as
Mall of the South
Panel
:
Yasmin Carrim (Presiding Member)
:
Fiona Tregenna (Tribunal Member)
:
Thando Vilakazi (Tribunal Member)
Heard
on
:
25 November 2020
Order
Issued on
:
25 November 2020
Reasons
Issued on
:
10 December 2020
Reasons for Decision
Approval
[1]
On 25 November 2020, the Competition Tribunal ("Tribunal")
approved the proposed transaction between RMB Investments and
Advisory (Pty) Ltd and Redefine Properties Limited and the Trustees
for the time being of Truzen 89 Trust in respect of the property
letting enterprise known as Mall of the South.
[2]
The reasons for approving the proposed transaction follow.
Parties to proposed
transaction
Primary
acquiring finns
[3]
The first primary acquiring firm is RMB Investments and Advisory
Proprietary
Limited ("RMBIA"). RMBIA is an investment
company incorporated in accordance with the company laws of the
Republic of South
Africa. RMBIA is a wholly owned subsidiary of
FirstRand Investment Holdings Limited ("FirstRand Investment
Holdings").
FirstRand Investment Holdings is controlled by
FirstRand Limited ("FirstRand"}, a public company listed on
Johannesburg
Securities Exchange ("JSE") and the Namibian
Stock Exchange. FirstRand is not controlled by any firm or
shareholder.
[4]
RMBIA is an investment company and its main business is the
acquisition
and holding of assets for investment purposes. [...]
[5]
The second primary firm is Redefine Properties Limited ("Redefine"},
a Real Estate Investment Trust ("REIT") which is listed on
the JSE and is not controlled by any firm or shareholder. Redefine
controls numerous firms such as Alice Lane Trust, Annuity Asset
Managers (Pty) Ltd, and Annuity Properties Limited.
[6]
Redefine's property portfolio comprises a diverse range of properties
comprising office, retail, residential and industrial space situated
throughout South Africa.
Primary
target firm
[7]
The primary target firm is the Trustees for the time being of
Truzen
89 Trust ("Truzen Trust") in respect of the property
letting enterprise known as Mall of the South ("Target
Property"). The Target Property is a regional centre comprising
of 72 070m2 of gross lettable area ("GLA") and is
situated
on the corner of Swartkoppies Road and Kliprivier Drive, Aspen Lakes
Extension 12, in the Gauteng Province.
[8]
[...]
Proposed
transaction and rationale
[9]
In terms of the proposed transaction, RMBIA, Redefine, and the
Truzen
Trust have entered into a Sale of Enterprise Agreement ("Sale
Agreement") and agreed to incorporate a new company
("Propco
SPV") with the intention that Propco SPV will acquire the
property letting enterprise known as Mall of the South
together with
the fixed assets and the property upon which it is located
("Enterprise") from Truzen Trust. This transaction
shall be
referred to as the "Enterprise Transaction".
[10]
The parties had initially anticipated that they would have to
exercise a PUT Option
Arrangement but later confirmed that they only
wanted approval for the Enterprise Transaction.'
[11]
Upon implementation of the proposed transaction, the shares in Propco
SPV will be held
by RMBIA (80%) and Redefine (20%). Both RMBIA and
Redefine will exercise joint control over Propco SPV and the Mall of
the South.
[12]
[â¦]
[13]
[â¦]
[14]
[â¦]
Impact
on competition
[15]
The
Commission considered the activities of the merging parties and found
that the proposed
transaction
results
in
a
horizontal
overlap
in the
market
for
rentable
retail
space in regional and comparative centres at Aspen Lakes Extension
12, Gauteng. The overlap arises due to Redefine's ownership
of three
comparative retail centres within a 25km radius of the Target
Property
at
Aspen Lakes Extension 12.
[2]
[16]
In
terms of
the
market
shares, the
Commission
submitted that post-merger, the
merged
entity
will
have
an
estimated
market
share
of
13.90%
with
an
accretion
of
4.60%
.
[3]
Further, the Commission submitted that the merged entity will
continue to face competition from numerous competing retail
properties
which are owned by Momentum Metropolitan, JH Group, Hyprop
Investments Limited & Ellerine Bros, One
Property
Holdings and Vukile Property Fund Limited.
[17]
In light of the above, the Commission is of the view that the
proposed transaction
is unlikely to substantially prevent or lessen
competition within the relevant market.
Public interest
[18]
The merging parties confirmed that there will be no retrenchments or
job losses
arising from the transaction. All employees employed by
Truzen Trust in respect of the Mall of the South, will be transferred
to
Propco SPV in terms of Section 197 of the Labour Relations Act.
[19]
The proposed transaction 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.
Signed
by:Yasmin Tayob Carrlm
Signed
at:2020-12-10 11:41:30 +02:00
Reason:I
approve this
document
10
December 2020
Ms.
Yasmin
Carrim DATE
Prof
Fiona Tregenna and Dr Thando Vilakazi concurring
Tribunal
Researcher: Busisiwe
Masina
For
the merging parties: Vani
Chetty of Vani Chetty Competition Law (Pty) Ltd.
For
the Commission: Nonhlanhla
Msiza
[1]
[...]
[2]
Please see Table 1 page 81-83 of the Competitive Report
[3]
Please see Table 3 page 14 of the CC recommendation