COMPETITION TRIBUNAL OF SOUTH AFRICA
Case no: LM013Apr22
In the large merger between:
K2022341645 (South Africa) Proprietary Limited Primary Acquiring Firm
And
Five Properties in the Live Easy Portfolio
Heard on: 21 July 2022
Order issued on: 21 July 2022
Primary Target Firms
REASONS FOR DECISION
[1] On 21 July 2022, the Competition Tribunal (“Tribunal”) unconditionally approved the
large merger between K2022341645 (South Africa) Proprietary Limited (“BidCo”) and
Five Properties in the Live Easy Portfolio.
Transaction
[2] In terms of the proposed merger, BidCo intends to acquire 100% of the issued share
capital of each of the firms which make up the Live Easy Portfolio. Upon implementation
of the proposed merger, the Live Easy Portfolio will be controlled by BidCo.
Merging parties’ activities
Primary acquiring firm
[3] BidCo is an entity incorporated for the purposes of the proposed merger and does not
control any other entities. Post-merger, BidCo will be controlled by 27Four Life Limited
("27Four Life") as to %, Scipio Investments Proprietary Limited ("Scipio") as to
%, and TwentyFive 15 Proprietary Limited ("TwentyFive 15") as to %.
[4] 27Four Life’s shareholding in BidCo will be controlled by Mergence Investment
Managers Proprietary Limited ("MIM") which is ultimately controlled by the Mergence
Group Proprietary Limited ("Mergence Group"). Mergence Group is in turn controlled by
in his personal capacity.
[5] Scipio is controlled by Montgomery Investments Proprietary Limited ("Montgomery").
Montgomery is in turn jointly controlled by and In addition to
Scipio, Montgomery controls Agricola Investments Proprietary Limited.
[6] TwentyFive 15 is controlled by Boofy Investments Proprietary Limited ("Boofy") .1 Boofy
is in turn is controlled by Boofy Family Trust. The Boofy Family Trust does not control
any other firms. 2
[7] The Acquiring Group holds and manages assets in financial, property , and industrial
services. The Acquiring Group does not have a direct shareholding interest in residential
property-owning entities.
Primary target firm
[8] The Live Easy Portfolio comprises five property holding and management firms (“the
Target Firms”) , and are as follows : Huis Dawid Proprietary Limited ("Huis Dawid");
Optima Asset Management Proprietary Limited ("Optima"); Rivport Proprietary Limited
("Rivport"); Sciprime Proprietary Limited ("Sciprime"); and Unlocked Properties 30
Proprietary Limited ("Unlocked").3
[9] The Target Firms are controlled by Scipio Stockdale Street Investments
Partnership V ("Stockdale Street") and TwentyFive 15
4 The Target Firms are special purpose vehicles incorporated to develop and
manage affordable housing developments and do not control any other firms.
[10] Each of the Target Firms hold and manage a rental residential property. The rental
residential propert ies in the Live Easy Portfolio are made up of self -contained units
averaging 15 square meters. These properties consist of the following –
10.1. Huis Dawid, located at Johannes Ramokhoase Street, Pretoria CBD;
10.2. Optima, located at the Corner of Hill Street and Kent Avenue, Ferndale;
10.3. Live Easy Rivonia, located at 23A 10th Avenue, Rivonia Sandton;
10.4. Sciprime, located at 53 Main Street in Marshalltown, Johannesburg CBD; and
10.5. Unlocked 30, located at Suid Afrikaanse Vrouefederasie Building, 323 Nana
_____Sita Street, Pretoria CBD.
Competition assessment
[11] The Competition Commission (“Commission”) considered the activities of the merging
parties and found that the proposed merger does not give rise to any overlap. This is
parties and found that the proposed merger does not give rise to any overlap. This is
because BidCo a nd its controllers are not invested in any firm that competes with the
Target Firms.
[12] On this basis , we find that the proposed merger will not lead to any substantial
prevention or lessening of competition in any relevant market.
1 TwentyFive 15 has non-controlling interest in several firms and controlling interest in the following
properties: Vistaero Hotel Bera Johannesburg, Monarchs Senior Living, Anderson Street Live Easy,
Bathopele House, and Blue Mergence.
2 BidCo and all the firms directly and indirectly controlling are collectively referred to as the “Acquiring
Group”
3 These firms are collectively referred to as the “Target Firms”
4 TwentyFive 15 is involved in the day-to-day management of the Live Easy Portfolio and accordingly
is deemed a controller along with Scipio and Stockdale Street.
Public interest
Employment
[13] The merging parties provided an unequivocal statement that no retrenchments will arise
as a result of the proposed merger.
[14] BidCo, as a newly established special purpose vehicle, does not have any employees.
Furthermore, pre-merger, the Live Easy Portfolio is managed by TwentyFive 15, and this
will continue post-merger.
[15] The Commission engaged the Target Firms relevant employee representative who
confirmed that employees were aware of the proposed merger and no employment
concerns were raised.
Spread of ownership
[16] The Target Firms have no historically disadvantaged person (“HDP”) shareholding.
[17] is a HDP shareholder and holds an effective shareholding of in
MIM. As previously mentioned, MIM has a % shareholding in BidCo. This translates
into an effective HDP shareholding of about %, resulting in greater levels of HDP
ownership.
[18] In light of the above, the proposed merger is unlikely to raise employment concerns and
raises a positive effect on ownership.
Conclusion
[19] Based on the evidence set out above, we concluded that the proposed merger is unlikely
to substantially prevent or lessen competition in any relevant market. Furthermore, the
proposed merger does not raise any public interest concerns.
2 August 2022
Prof Liberty Mncube Date
Ms Yasmin Carrim and Dr Thando Vilakazi concurring
Tribunal Case Managers: Baneng Naape and Leila Raffee
For the Merging Parties: Chris Charter and Alistair Dey-van Heerden of Cliffe
Dekker Hofmeyr Inc.
For the Commission: Horisani Mhlari and Ratshidaho Maphwanya