Arrowhead Properties Limited v Vividend Income Fund Limited (018929) [2014] ZACT 105 (24 July 2014)

Arrowhead Properties Limited v Vividend Income Fund Limited (018929) [2014] ZACT 105 (24 July 2014)

The Tribunal found that the proposed transaction would not substantially prevent or lessen competition in the relevant markets for rental space in B-Grade office properties in the Randburg and Durban CBD nodes, nor in convenience centres within a 10km radius of certain Vividend retail properties. The merging parties' post-merger market shares would remain low, and there was no significant geographic overlap in retail properties. However, the transaction raised public interest concerns due to the likelihood of retrenchment of 21 Vividend employees. After deliberation, the merging parties agreed to employ the affected employees on a permanent basis. The Tribunal approved the merger subject...

Citation
[2014] ZACT 105
Parties
Applicant: Arrowhead Properties Limited; Respondent: Vividend Income Fund Limited; Respondent: Competition Commission
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
24 July 2014
Case Number
018929
Procedural Posture
Merger Control / Tribunal Approval of Proposed Merger
Outcome
Merger approved subject to employment retention condition.
Judges
T Madima, F Tregenna, A Ndoni
Legal Topics
Merger Control, Public Interest, Employment Retrenchment, Horizontal Overlap, Market Definition
Competition Law Commercial and Corporate Merger Control Public Interest Employment Retrenchment Horizontal Overlap Market Definition

Case Brief

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Parties

Arrowhead Properties Limited

Applicant

Vividend Income Fund Limited

Respondent

Competition Commission

Respondent

Procedural Posture

Merger Control / Tribunal Approval of Proposed Merger

Legal Issues

  1. 1 Whether the proposed acquisition by Arrowhead of 100% of Vividend's linked units is likely to substantially prevent or lessen competition in relevant property rental markets.
  2. 2 Whether the transaction raises significant public interest concerns, particularly regarding employment retrenchments.

Ratio Decidendi

The Tribunal found that the proposed transaction would not substantially prevent or lessen competition in the relevant markets for rental space in B-Grade office properties in the Randburg and Durban CBD nodes, nor in convenience centres within a 10km radius of certain Vividend retail properties. The merging parties' post-merger market shares would remain low, and there was no significant geographic overlap in retail properties. However, the transaction raised public interest concerns due to the likelihood of retrenchment of 21 Vividend employees. After deliberation, the merging parties agreed to employ the affected employees on a permanent basis. The Tribunal approved the merger subject...

Court Disposition

Merger approved subject to employment retention condition.

Orders

  • The proposed transaction is approved unconditionally except for the condition that the merged entity shall not retrench the 21 employees for a period of three years from the effective date as a result of the transaction.