COMPETITION TRIBUNAL OF SOUTH AFRICACase No.: LM048Jul21 In the matter between:Growthpoint Properties LtdPrimary Acquiring FirmAndJoburg Stay (Pty) LtdPrimary Target FirmE Daniels (Presiding Member)I Valodia (Tribunal Member)Panel:Y Carrim (Tribunal Member)Heard on: 15 September 2021Order Issued on: 15 September 2021ORDERFurther 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; and2. a Merger Clearance Certificate be issued in terms of Competition Tribunal Rule 35(5)(a).15 September 2021Presiding MemberMr Enver DanielsDateConcurring: Prof Imraan Valodia and Ms Yasmin Carrim
Date: 15 September 2021To: Webber Wentzel AttorneysCase Number: LM048Jul21Growthpoint Properties Ltd And Joburg Stay (Pty) LtdYou applied to the Competition Commission on 07 July 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 ifa) 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 10About 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).Contactingthe TribunalThe Competition TribunalPrivate Bag X24SunnysidePretoria 0132Republic of South Africatel: 27 12 394 3300fax: 27 12 394 0169e-mail: ctsa@comptrib.co.za
Merger Clearance CertificateThis 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.
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COMPETITION TRIBUNAL OF SOUTH AFRICA Case no: LM048Jul21 Growthpoint Properties Ltd (Primary Acquiring Firm) and Joburg Stay (Pty) Ltd (Primary Target Firm) REASONS FOR DECISION [1] On 15 September 2021, the Competition Tribunal unconditionally approved a large merger between Growthpoint Properties Ltd (and Joburg Stay (Pty) Ltd (Joburg Stay. [2] Growthpoint is not controlled by any single firm. Growthpoint is a JSE-listed real estate investment trust. It is a property investment holding company with a property portfolio consisting of rentable office, retail and industrial space across South Africa. Growthpoint acts as the landlord of the properties it owns and lets the properties to its tenants. It holds no student accommodation properties. [3] Joburg Stay is a property holding company wholly owned by Varsity Stay (Pty) Ltd 1 Varsity Stay is solely controlled by the Feenstra Group (Pty) Ltd .2 Joburg Stay currently owns a 50% share in three student accommodation properties in Johannesburg and the rental enterprises conducted thereon.3 [4] The transaction involves various contractually inter-conditional steps that constitute one indivisible transaction.4 Post-merger, Growthpoint will have control over Joburg Stay and the target properties5 by virtue of its ability to appoint the majority of the board members. 1 Varsity Stay controls three student accommodation properties known as: Varsity Studios and the rental enterprise conducted thereon ("VS Property") (100%); Festival Edge and the rental enterprise conducted thereon ("FE Property") (50%); Studios @ . 2 The Feenstra Group wholly controls Hatfield Studios (Pty) Ltd, which in turn owns the student accommodation property known as Hatfield Studios and the rental enterprise conducted thereon ("HS Property"). 3 Kingsway Place in Auckland Park ; The Richmond in Auckland Park ; Richmond Central in Richmond . 4 The Feenstra Group will implement an internal reorganisation such that at the time of implementation of the proposed transaction, the KP Property,
such that at the time of implementation of the proposed transaction, the KP Property, RM Property, RC Property, HS Property, VS Property, SB Property and FE Property (and the relevant rental enterprises conducted thereon) will be wholly owned by Joburg Stay. 5 The KP Property, RM Property, RC Property, HS Property, VS Property, SB Property and FE Property (and the relevant rental enterprises conducted thereon).
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[5] The Commission found no horizontal overlaps in the activities of the merger parties as
Growthpoint owns no student accommodation. The Commission found no vertical
overlaps as they do not participate at different levels of the same supply chain.
[6] The Commission considered whether the likelihood of the exchange of competitively
sensitive information between Growthpoint and the Feenstra Group, given that (i) both
firms are involved in the provision of rentable office space; and (ii) the transaction
results in Growthpoint and the Feenstra Group having direct links to each other via
Growthpoint will appoint
Feenstra Group for an initial to manage the target properties.
[7] The Commission found that nlikely to fall
within the same geographic scope or pose a constraint on each other for competition
assessment purposes. Accordingly, the Commission found that the proposed
transaction was unlikely to create a platform for the exchange of competitively sensitive
information to the detriment of competition in the office space market.
[8] The merging parties provided an unequivocal statement that there will be no
retrenchments as a result of the proposed transaction. The Commission found that the
employees
the Feenstra Group on no less favourable terms and conditions.
[9] The Commission found that the merger is likely to promote a greater spread of
ownership by historically disadvantaged persons in the market because post-merger,
Joburg Stay will benefit from Growthpoint shareholding by historically disadvantaged
persons of above 40%.
[10] No third party raised any concern.
[11] 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 the public
interest.
15 September 2021
Mr Enver Daniels Date
Ms Yasmin Carrim and Prof Imraan Valodia concurring
Tribunal Case Manager: P Kumbirai
For the Merging Parties: S van der Meulen and S Manley of Webber Wentzel
For the Merging Parties: S van der Meulen and S Manley of Webber Wentzel
For the Commission: B Chomela, Z Hadebe and T Masithulela