Absa Bank Limited v Retail Africa Wingspan Investments (Proprietary) Limited (87/LM/AUG08) [2008] ZACT 90 (22 October 2008)
- Citation
- [2008] ZACT 90
- Status
- Judgment
- Jurisdiction
- South Africa
- Court
- Competition Tribunal
- Panel
- D Lewis, N Manoim, Y Carrim
- Case number
- 87/LM/AUG08
More details
- Court
- Competition Tribunal
- Panel
- D Lewis, N Manoim, Y Carrim
- Case number
- 87/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 minor overlap in the category of community shopping centres between Absa and Wingspan, there is no geographic overlap in the locations of their respective properties. Absa does not own any shopping centres in Centurion, Vredenburg, or Hartebeespoort, where Wingspan's centres are situated. The transaction will result in Absa acquiring joint control, but not sole control, over Wingspan. The Tribunal concluded that the merger will not result in any substantial lessening or prevention of competition in any relevant market in the property sector. No public interest issues were identified. Accordingly, the merger was approved unconditionally.
Court disposition
Merger approved unconditionally; no substantial lessening or prevention of competition found.
Orders
- The merger between Absa Bank Limited and Retail Africa Wingspan Investments (Proprietary) Limited is approved without conditions.
02
Material facts
Parties
Absa Bank Limited
Applicant Counsel: M. Griffiths and A. van LoggerenbergRetail Africa Wingspan Investments (Proprietary) Limited
RespondentAmounts and remedies
- Absa Shareholding Acquired in Wingspan (%): 30
- Eygenberger Trust Shareholding Retained (%): 14.31
- Kruger Trust Shareholding Retained (%): 17.11
- Oak Tree Trust Shareholding Retained (%): 1.4
- Pickard Trust Shareholding Retained (%): 18.5
- Wingspan Investment Trust Shareholding Retained (%): 18.5
- Cahi Shareholding Retained (%): 0.17
03
Procedural history
Posture
Merger Control / Merger 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 markets.
- 02
Whether there are any public interest concerns arising from the transaction.
Party arguments
- Applicant
- Absa Bank Limited argued that the acquisition of a 30% shareholding in Wingspan, with minority protection rights, forms part of its broader property investment strategy. The transaction is intended to facilitate future expansion and growth for both parties, and will not result in any single shareholder exercising sole control over Wingspan. Absa asserted that there is no geographic overlap between its existing shopping centres and those of Wingspan, and thus no competition concerns arise.
- Respondent
- Retail Africa Wingspan Investments and its shareholders supported the transaction, viewing it as an opportunity to generate cash for future expansion and growth. They concurred with the assessment that there is only a minor overlap in the category of community shopping centres, but no geographic overlap exists. The parties maintained that the merger would not adversely affect competition in any relevant market.
05
Court’s reasoning
Legal principles
- 01
Competition Act, No. 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 jurisprudence
Joint control arises where no single shareholder can exercise sole control, but two or more parties can together control strategic decisions.
06
Ratio, limits and disposition
Ratio decidendi
The Tribunal found that although there is a minor overlap in the category of community shopping centres between Absa and Wingspan, there is no geographic overlap in the locations of their respective properties. Absa does not own any shopping centres in Centurion, Vredenburg, or Hartebeespoort, where Wingspan's centres are situated. The transaction will result in Absa acquiring joint control, but not sole control, over Wingspan. The Tribunal concluded that the merger will not result in any substantial lessening or prevention of competition in any relevant market in the property sector. No public interest issues were identified. Accordingly, the merger was approved unconditionally.
Obiter and limits
- The definition of community shopping centre refers to the size of the centre, not its location.
- Recent similar transactions, such as the Absa and Ballito Junction merger, were also approved unconditionally.
Court disposition
Merger approved unconditionally; no substantial lessening or prevention of competition found.
- The merger between Absa Bank Limited and Retail Africa Wingspan Investments (Proprietary) Limited 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
IN THE COMPETITION
TRIBUNAL OF SOUTH AFRICA
CASE NO: 87/LM/AUG08
In the merger between:
Absa Bank Limited Primary Acquiring Firm
and
Retail Africa Wingspan Investments (Proprietary) Limited Primary Target Firm
______________
Panel : D Lewis (Presiding Member), N Manoim (Tribunal Member), and
Y Carrim (Tribunal Member)
Heard on : 8 October 2008
Order issued on : 8 October 2008
Reasons issued on : 22 October 2008
REASONS
FOR DECISION
APPROVAL
[1] On 8 October 2008 the Tribunal unconditionally approved the property merger between the aforementioned parties. The reasons for the decision follow:
THE MERGING PARTIES
[2] The primary acquiring firm is ABSA Bank (“Absa”) which owns the following retail shopping centres: Ballito Junctioni; a neighborhood shopping centre situated in Ballito, Kwazulu Natal; 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.
[3] The primary target firm is Retail Africa Wingspan Investments (“Wingspan”), a property fund which principally holds newly developed shopping centres, of which relevant to this transaction are five retail shopping centres: Irene Village Mall (Phase 1); a community shopping centre situated in Centurion, Irene Village Mall (Phase 2); a community shopping centre in Centurion still under construction, Westwood Mall; a regional shopping centre in Durban still under construction, West Coast Mall; a community shopping centre in Vredenburg which is still under construction, and the Village at Hartebeespoort (phase 1); a community shopping centre in Hartebeespoort which is also still under construction.
[4] Wingspan is jointly controlled by Eygenberger Investment, Kruger Investment Trust, Oak Tree Trust, Pickard Investment Trust and Wingspan Investment Trust, which in turn are jointly controlled by Rapfund Holdings, Retail Africa (Pty) Ltd and Retail Africa Asset Management (Pty) Ltd.
THE TRANSACTION AND
RATIONALE
[5] In terms of the transactions ABSA intends to acquire 30% of the entire issued share capital of Wingspan with minority protection rights relating to material strategic and commercial decisions. The existing Wingspan shareholders will dilute their shares pro rata to facilitate the 30% purchase by Absa. Post transaction no single shareholder will be able to exercise sole control over Wingspan, but Absa is in a position to exercise joint control with one or more of the minority shareholders.1
[6] According to Absa the proposed transaction is part of its wider property investment strategy. Wingspan’s shareholders regard this as an opportunity to generate cash to fund future expansion and growth opportunities.
COMPETITION EVALUATION
[7] According to the Commission and the parties, there is a minor overlap in respect of community shopping centres, however there is no geographic overlap as Absa does not have any community or other shopping centre in Centurion, Vredenburg and Hartebeespoort where Wingspan’s properties are situated. 2
CONCLUSION
[8] 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.
[9] There are no public interest issues.
___ 22 October 2008
N Manoim Date
Tribunal Member
D Lewis and Y Carrim concur in the judgment of N Manoim
For the merging parties : M. Griffiths and A. van Loggerenberg
For the Commission : K. Mahlakoane
(Mergers and Acquisitions)
Tribunal Researcher: L Xaba
1 The balance of the shares in Wingspan (i.e. 70%) will be retained by the existing shareholders – Eygenberger Trust (14.31), Kruger Trust (17.11%), Oak Tree Trust (1.40%), Pickard Trust (18.50%), Wingspan Investment Trust(18.50%), and Cahi (0.17%).
2 Shopping centres are defined according to size. The phrase community shopping centre refers thus to the centres size and not its location.
i See recent transaction between Absa and Ballito Junction which we unconditionally approved on 23 September 2008 – Case No: 84/LM/Aug08.
3
Case-aware research
Ask AI about this case
The judgment and available research above are public. New questions open in a separate private conversation grounded in this case.