COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No.: LM009Apr21
In the matter between:
Government Employees Pension Fund Primary Acquiring Firm
And
Menlyn Maine Investment Holdings (Pty) Ltd Primary Target Firm
Mr Enver Daniels (Presiding Member)
Prof Imraan Valodia (Tribunal Member)
Panel:
Dr Thando Vilakazi (Tribunal Member)
Heard on: 27 July 2021
Order Issued on: 27 July 2021
ORDER
Further to the recommendation of the Competition Commission in terms of section
14A(1)(b) of the Competition Act, 1998 (“the Act”) the Competition Tribunal orders that–
1. the merger between the abovementioned parties be approved in terms of section
16(2)(a) of the Act; and
2. a Merger Clearance Certificate be issued in terms of Competition Tribunal Rule
35(5)(a).
27 July 2021
Presiding Member
Mr Enver Daniels
Date
Concurring: Prof Imraan Valodia and Dr Thando Vilakazi
Date : 27 July 2021
To : Cliffe Dekker Attorneys
Case Number: LM009Apr21
Government Employees Pension Fund And Menlyn Maine
Investment Holdings (Pty) Ltd
You applied to the Competition Commission on 07 April 2021 for
merger approval in accordance with Chapter 3 of the Competition
Act.
Your merger was referred to the Competition Tribunal in terms of
section 14A of the Act, or was the subject of a Request for
consideration by the Tribunal in terms of section 16(1) of the Act.
After reviewing all relevant information, and the recommendation
or decision of the Competition Commission, the Competition
Tribunal approves the merger in terms of section 16(2) of the Act,
for the reasons set out in the Reasons for Decision.
This approval is subject to:
x no conditions.
the conditions listed on the attached sheet.
The Competition Tribunal has the authority in terms of section 16(3)
of the Competition Act to revoke this approval if
a) it was granted on the basis of incorrect information for which
a party to the merger was responsible.
b) the approval was obtained by deceit.
c) a firm concerned has breached an obligation attached to
this approval.
The Registrar, Competition Tribunal
Notice CT 10
About this Notice
This form is prescribed by the Minister of Trade and Industry in terms of section 27 (2) of the Competition Act 1998 (Act No. 89 of 1998).
Contacting
the Tribunal
The Competition Tribunal
Private Bag X24
Sunnyside
Pretoria 0132
Republic of South Africa
tel: 27 12 394 3300
fax: 27 12 394 0169
e-mail: ctsa@comptrib.co.za
Merger Clearance Certificate
This notice is issued in
terms of section 16 of
the Competition Act.
You may appeal
against this decision to
the Competition
Appeal Court within 20
business days.
1
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case no: LM009Apr21
Government Employees Pension Fund (Primary Acquiring Firm)
and
Menlyn Maine Investment Holdings (Pty) Ltd (Primary Target Firm)
Heard on: 27 July 2021
Order Issued on: 27 July 2021
REASONS FOR DECISION
[1] On 27 July 2021, the Competition Tribunal unconditionally approved a large merger
between the Government Employees Pension Fund (“GEPF”) and Menlyn Maine
Investment Holdings (Pty) Ltd (“MMIH”).
[2] GEPF intends to acquire sole control over MMIH’s undivided share of Redevelopment
Erf 3 and its share of the rental enterprise known as Central Square, Menlyn Maine
("Target Property").
[3] The GEPF is represented by the Public Investment Corporation SOC L td ("PIC") and
controlled by its Board of Trustees. The GEPF holds interests in multiple firms,
including MMIH. The PIC is controlled by the South African government.
[4] Pre-merger, t he shares in MMIH are held by African Spirit Trading 306 (Pty) Ltd ,
Kgwara Investments (Pty) Ltd, Henk Boogertman, GEPF, and African Spirit Trading
309 (Pty) Ltd.
[5] The GEPF is a defined benefit pension fund that manage s and administers pensions
and other benefits for government employees in South Africa. The PIC, on behalf of
the GEPF, invests in various classes of assets including equities, property and fixed
income.
[6] The Target Property comprises of a retail component, a gymnasium, office space, and
retail/business premises.
[7] When assessing the merging parties’ activities, the Commission identified a horizontal
overlap as the GEPF holds controlling and non -controlling interests in various firms
that are active in the property industry, and which compete with the Target Property.
This finding raised a concern in relation to potential coordinated effects through
information sharing , that may arise as a result of GEPF’s cross shareholding in
competing firms.
[8] In assessing the potential coordinated effect s of the proposed transaction , the
[8] In assessing the potential coordinated effect s of the proposed transaction , the
Commission noted that, as a shareholder in multiple firms that compete with the Target
Property, the GEPF has the ability to appoint directors in numerous firms in which it
holds shares. The Commission highlighted two firms in which the GEPF can appoint
2
directors or has control: SA Corporate Real Estate 1 (in which the GEPF has a non -
controlling interest and one director) and Growthpoint2 (in which the GEPF also has a
non - controlling interest and one director).
[9] Because the Target Property competes with Brooklyn Mall, which is controlled by
Growthpoint and on whose board the PIC is represented, the Commission considered
the extent to which coordinated effects could arise. In addressing this concern, the
Commission considered the PIC’s Integrity Walls Policy (“the Policy”),
The Commission therefore highlighted the fact that, because the
Target Property is unlisted, while Growthpoint is listed,
any sensitive information will not be exchanged.
[10] Based on the fact that the Target Property and Growthpoint will be managed in
separate divisions, and the
the Commission is of the view that there are su fficient measures
in place to alleviate any information sharing concerns that might arise as a result of the
proposed transaction.
[11] The Commission was therefore of the view that the proposed merger is unlikely to
substantially prevent or lessen competition.
[12] The merger raises no public interest concerns.
[13] We concluded that the proposed transaction is unlikely to substantially prevent or
lessen competition in any relevant market, or to have a negative impact on public
interest.
27 July 2021
Mr Enver Daniels Date
Dr Thando Vilakazi and Prof Imraan Valodia concurring.
Tribunal Case Manager: Camilla Mathonsi
For the Merging Parties: Andries Le Grange and Nelisiwe Khumalo of CDH
For the Commission: Thabelo Masithulela and Sewela Moshoma
1 SA Corporate controls Willow Way Shopping Centre which is considered a Neighbourhood Shopping Centre with a GLA of
approximately 7 933 square meters and located 5.5km away from the Target Property. However, based on case law, Willow Way
Shopping Centre cannot be considered as a competitive constraint due to its size.
Shopping Centre cannot be considered as a competitive constraint due to its size.
2 Growthpoint controls Brooklyn Mall which is located 6.1km away from the Target Prop erty and which is considered a regional
shopping centre with a GLA of approximately 81 850 square metres.
Reason:Witnessing Enver Daniels
Signed by:Enver Daniels
Signed at:2021-07-27 16:54:20 +02:00