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COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No.: LM152Dec21
In the matter between:
Twin City Western Cape (Pty) Ltd Primary Acquiring Firms
And
Waterway House Section Two (Pty) Ltd Primary Target Firms
Panel: M Mazwai (Presiding Member)
T Vilakazi (Tribunal Panel Member)
F Tregenna (Tribunal Panel Member)
Heard on: 1 March 2021
Order Issued on: 1 March 2021
Reasons Issued on: 18 March 2021
REASONS FOR DECISION
[1] On 01 March 2022, the Competition Tribunal (“Tribunal”) unconditionally approved a
large merger in terms of which Twin City Western Cape (Pty) Ltd1 intends to acquire
50% of the issued shares in Waterway House Section Two (Pty) Ltd2. Post-merger,
1 Twin City Western Cape is controlled by Twin City Trading 2 (Pty) Ltd (“TCT 2”), which is ultimately
controlled by the LMAE Trust . Twin City Western Cape controls various entities, including Rexileo
Investments (Pty) Ltd and Marleo Investments 25 (Pty) Ltd. Twin City Western Cape, TCT 2 and TDT,
together with all the firms that they directly an d indirectly control are collectively referred to as the
Acquiring Group.
2 Waterway House is jointly controlled by The Club Retail Park and V&A Waterfront Holdings. The Club
Retail Park is ultimately controlled by Atterbury Property (Pty) Ltd. V&A Waterfr ont Holdings is jointly
owned by Growthpoint Properties Ltd (“Growthpoint”) and the Government Employees Pension Fund
(represented by Public Investment Corporation) (“GEPF”).
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Twin City We stern Cape, and V&A Waterfront (Pty) Ltd will have joint control of
Waterway House.
Merging parties’ activities
[2] Twin City Western Cape is a property investment company, which forms part of a group
controlled by Twin City Development (Pty) Ltd (“the Twin City Group”), which controls
a diversified retail, commercial, residential, and farming property portfolio with
properties situated throughout South Africa.
[3] Waterway House is a property holding company.
Competition Assessment
[4] The Competition Commission (“Commission”) found that the proposed transaction
gives rise to a horizontal overlap in the activities of the merging parties. This is because
Waterway House has a P -grade office property at the Waterfront, Cape Town, and
Twin City Group Cape (part of Twin City Group) controls a diversified property portfolio
that has rentable offices.
[5] The Commission found that Twin City Group does not have any rentable office
properties in the Waterfront node (where the target is situated), nor in Cape Town. The
closest office property that the Twin City Group owns is located in Stellenbosch, which
is approximately 54km from the Waterway House property.
[6] No third party raised any concerns with the proposed transaction.
[7] Based on the above, the Commission concluded that the proposed transaction is
unlikely to substantially prevent or lessen com petition in the relevant market. We
concur with this finding.
Public Interest
Effect on Employment
[8] The merging parties submitted that the proposed transaction will not adversely affect
employment and there is no intention to retrench any employees becaus e of the
proposed transaction. After considering the above, the Commission concluded that the
proposed transaction is unlikely to result in job losses.
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Effect on the greater spread of ownership
[9] Regarding the spread of ownership, the merging parties submitted that V&A
Waterfront, which controls the target firm, is partially controlled by Growthpoint, which
has 27.94% black ownership. Post -merger, there will be no adverse impact on the
spread of ownership since Growthpoint ( the joint controller of V&A Waterfront) will
remain a shareholder in the V&A Waterfront . Consequently, the Commission
recommended that the proposed transaction be unconditionally approved.
Other public interest issues
[10] The proposed transaction raised no other public interest concerns.
Conclusion
[11] We concluded that the proposed transaction is unlikely to substantially prevent or
lessen competition in any relevant market since there is no geographic overlap
between the Grade-P office properties of the merging firms. Furthermore, the proposed
transaction does not raise any public interest concerns.
18 March 2022
Ms Mondo Mazwai
Date
Dr Thando Vilakazi and Professor Fiona Tregenna
Tribunal Case Managers: Sinethemba Mbeki and Camilla Mathonsi
For the Merging Parties: Misha van Niekerk of Adams and Adams
For the Competition: Beverley Chomela and Thabelo Masithulela