Absa Bank Limited v Ballito Junction Development (Pty) Ltd (84/LM/AUG08) [2008] ZACT 89 (22 October 2008)
- Citation
- [2008] ZACT 89
- Status
- Judgment
- Jurisdiction
- South Africa
- Court
- Competition Tribunal
- Panel
- N Manoim, Y Carrim, M Mokuena
- Case number
- 84/LM/AUG08
More details
- Court
- Competition Tribunal
- Panel
- N Manoim, Y Carrim, M Mokuena
- Case number
- 84/LM/AUG08
On this page
Professional case brief
Research organized from the available case record
01
Holding and result
The Tribunal found that although there is a horizontal overlap in the activities of the merging parties in respect of neighbourhood retail shopping centres, there is no geographic overlap since Absa does not own any such centre in Ballito, KwaZulu-Natal, where Ballito Junction’s only property is situated. Consequently, the merger will not result in any substantial lessening or prevention of competition in any relevant market in the property sector. There are no public interest issues arising from the transaction. The merger is approved without conditions.
Court disposition
Merger approved without conditions.
Orders
- The merger between Absa Bank Limited and Ballito Junction Development (Pty) Ltd is approved without conditions.
02
Material facts
Parties
Absa Bank Limited
Applicant Counsel: M Griffiths and E PosthumusBallito Junction Development (Pty) Ltd
Respondent03
Procedural history
Posture
Merger Application / Approval
04
Questions and positions
Legal issues
- 01
Whether the proposed merger will result in a substantial lessening or prevention of competition in the relevant property sector markets.
- 02
Whether there are any public interest concerns arising from the merger.
Party arguments
- Applicant
- Absa Bank Limited argued that the transaction is part of its broader strategy to secure returns from investments in the property sector. The merger involves moving from joint to sole control of Ballito Junction, with Absa increasing its shareholding from 50% to 100%. Absa submitted that there is only a horizontal overlap in neighbourhood retail shopping centres, but no geographic overlap, as it does not own any such centre in Ballito, KwaZulu-Natal.
- Respondent
- Ballito Junction Development (Pty) Ltd supported the transaction as part of its business development strategy. The respondent concurred that the merger would not affect competition adversely, given the lack of geographic overlap and the limited scope of the transaction.
05
Court’s reasoning
Legal principles
- 01
Competition Act, 89 of 1998
A merger may only be prohibited if it is likely to substantially prevent or lessen competition in any relevant market.
- 02
Competition Tribunal Guidelines
The assessment of horizontal overlap must consider both product and geographic market dimensions.
06
Ratio, limits and disposition
Ratio decidendi
The Tribunal found that although there is a horizontal overlap in the activities of the merging parties in respect of neighbourhood retail shopping centres, there is no geographic overlap since Absa does not own any such centre in Ballito, KwaZulu-Natal, where Ballito Junction’s only property is situated. Consequently, the merger will not result in any substantial lessening or prevention of competition in any relevant market in the property sector. There are no public interest issues arising from the transaction. The merger is approved without conditions.
Obiter and limits
- The terms 'community' and 'neighbourhood' refer to the size, not the location, of the shopping centres.
- The Tribunal noted the importance of considering both product and geographic market overlaps in merger assessments.
Court disposition
Merger approved without conditions.
- The merger between Absa Bank Limited and Ballito Junction Development (Pty) Ltd is approved without conditions.
Source and reliance status
Competition Tribunal
This page organises the available record for research. Confirm quotations, current status, and subsequent treatment against the official source before relying on the case.
Judgment reading view
Judgment text
The complete available source text.
Competition Tribunal
Judgment
COMPETITION TRIBUNAL
OF SOUTH AFRICA
CASE NO: 84/LM/AUG08
In the matter between:
ABSA BANK LIMITED Acquiring Firm
and
BALLITO JUNCTION DEVELOPMENT (PTY) LTD Target firms
______________
Panel : N Manoim (Presiding Member), Y Carrim (Tribunal Member), and
M Mokuena (Tribunal Member)
Heard on : 23 September 2008
Order issued on : 23 September 2008
Reasons issued on : 22 October 2008
REASONS
FOR DECISION
APPROVAL
On 23 September 2008 the Tribunal approved the property merger between Absa and Ballito Junction. The reasons for the decision follow:
THE PARTIES
The primary acquiring firm is ABSA Bank which owns the following retail shopping centres; Maxcity shopping centre, a community shopping centre situated in Mamelodi in Pretoria; Valley shopping centre, a neighbourhood shopping centre situated in Dainfern in Johannesburg; and Krugersdorp shopping centre, a super-regional shopping centre in Krugersdorp, currently under construction.1 The primary target firm is Ballito Junction Development (Pty) Ltd which is jointly controlled by ABSA Bank (50%) and Robfair
Investments No. 139 CC (50%). Ballito Junction is a property holding company which owns only Ballito Shopping Centre, a neighborhood retail shopping centre, in Ballito, KwaZulu-Natal.
THE TRANSACTION AND
RATIONALE
The proposed transaction is a move from joint to sole control in that ABSA Bank intends to increase its shareholding in Ballito Junction from 50% to 100%.
Absa considers the proposed transaction as part of its wider strategy to secure returns from investments in the property sector. For Ballito Junction this is also part of its business development strategy.
RELEVANT PRODUCT
MARKET
There is only a horizontal overlap in the activities of the merging parties in respect to neighbourhood retail shopping centre. However, there is no geographic overlap since Absa does not have any neighbourhood retail shopping centre in Ballito, KwaZulu-Natal, where Ballito Junction’s only property is situated.
CONCLUSION
In light of the above, we find that this merger will not result in any substantial lessening or prevention of competition in any of the relevant markets in the property sector. Accordingly, we approve the merger without conditions.
There are no public interest issues.
___ 22 October 2008
N Manoim Date
Tribunal Member
Y Carrim and M Mokoena concur in the judgment of N Manoim
For the merging parties : M Griffiths and E Posthumus of Absa
For the Commission : T. Ravhugoni
(Mergers and Acquisitions)
Tribunal Researcher: L Xaba
1 The terms community and neighbourhood refer to the size not the location of the shopping centres.
3
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