1
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case no: LM182Jan21
In the matter between:
And
CDC Group PLC Primary Acquiring Firm
DiverCity Urban Property Fund
(Pty) Ltd
Primary Target Firm
Panel : E Daniels (Presiding Member)
: M Mazwai (Tribunal Member)
: H Cheadle (Tribunal Member)
Heard on : 24 February 2021
Order Issued on : 24 February 2021
Reasons Issued on : 01 March 2021
REASONS FOR DECISION
Unconditional approval
[1] On 24 February 2021, the Competition Tribunal (“Tribunal”) unconditionally
approved the proposed transaction in terms of which CDC Group PLC (“CDC
Group”) intends to acquire 35% of the ordinary shares in DiverCity Urban
Property Fund (Pty) Ltd (“DiverCity”).
[2] The reasons for the approval of the proposed transaction follow.
Parties to the transaction
[3] The acquiring firm is CDC Group, a development finance institution
incorporated in the United Kingdom (“UK”) and wholly owned by the UK
Government’s Foreign, Commonwealth & Development Office (“FCDO”).
2
[4] CDC Group controls Globeleq Limited, a producer and operator of electricity
generation in Africa, and Zambeef Products PLC, a Zambia-based beef
producer. In South Africa, CDC Group has investments in funds that have non-
controlling minority interests in investee companies that are active in, inter alia,
the consumer services, financial services, agriculture, and education sectors.
[5] The target firm is DiverCity, a private company whose shareholders include
IThemba Group Investments (Pty) Ltd, Atterbury Property Fund (Pty) Ltd,
Integer Properties 1 (Pty) Ltd, Nedbank Limited, and RMH Property HoldCo 5
(Pty) Ltd.
[6] DiverCity is a mixed-use private property holding, investment and development
fund focused on investing and renewing dense urban precincts. DiverCity’s
property portfolio includes retail property, residential property, and office
property.
Proposed transaction
[7] CDC Group intends to acquire 35% of the ordinary shares in DiverCity, such
that post-merger, CDC Group will exercise joint control over DiverCity.
Rationale for the transaction
[8] The acquiring firm views the proposed transaction as an opportunity to create
good quality, lower cost, centrally located and environmentally sustainable
rental housing-led projects.
[9] From the perspective of the target firm, the proposed transaction will enable it
to acquire capital to develop its pipeline.
Competition Analysis
[10] CDC Group is not active in the property sector in South Africa and does not
control any firm that is active in the property sector in South Africa. Therefore,
there is no horizontal overlap in the activities of the merger parties.
3
[11] Post-merger, the merged entity will face competition from various property
companies, including Growthpoint Properties Limited, Redefine Properties
Limited, and Fortress REIT Limited. Accordingly, the transaction does not give
rise to any competition concerns.
Public interest
[12] The proposed transaction does not give rise to any public interest concerns. 1
Conclusion
[13] In light of the above, the proposed transaction was approved unconditionally.
01 March 2021
Mr Enver Daniels Date
Ms Mondo Mazwai and Mr Halton Cheadle concurring.
Tribunal Case Manager : Duduetsang Mogapi
For the Merging Parties : V Chetty of Vani Chetty Competition Law (Pty)
Ltd
For the Commission : R Ncheche, R Maphwanya and A Mfuphi
1 Merger Record, pages 72 - 73.