Capital Property Fund v Pangbourne Properties Ltd (78/LM/Dec10) [2011] ZACT 14 (9 March 2011)

Capital Property Fund v Pangbourne Properties Ltd (78/LM/Dec10) [2011] ZACT 14 (9 March 2011)

The Tribunal found that the proposed merger between Capital Property Fund and Pangbourne Properties Limited would not result in a substantial prevention or lessening of competition in the property market. The horizontal overlaps in light industrial, grade A, and grade B office space resulted in low market shares post-merger, with only isolated nodes showing higher shares, which were mitigated by product and geographic constraints and customer countervailing power. The vertical relationship was not likely to result in foreclosure concerns, as asset management functions would be outsourced and competition from larger players would persist. No public interest concerns were identified....

Citation
[2011] ZACT 14
Parties
Applicant: Capital Property Fund; Respondent: Pangbourne Properties Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
9 March 2011
Case Number
78/LM/Dec10
Procedural Posture
Merger Control / Merger Approval
Outcome
The proposed merger is approved unconditionally.
Judges
N Manoim, A Wessels, Y Carrim
Legal Topics
Merger Control, Horizontal Overlap, Vertical Relationships, Market Share Analysis, Public Interest
Competition Law Commercial and Corporate Merger Control Horizontal Overlap Vertical Relationships Market Share Analysis Public Interest

Case Brief

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Parties

Capital Property Fund

Applicant

Pangbourne Properties Limited

Respondent

Procedural Posture

Merger Control / Merger Approval

Legal Issues

  1. 1 Whether the proposed merger would substantially prevent or lessen competition in the property market.
  2. 2 Whether any public interest concerns arise from the transaction.

Ratio Decidendi

The Tribunal found that the proposed merger between Capital Property Fund and Pangbourne Properties Limited would not result in a substantial prevention or lessening of competition in the property market. The horizontal overlaps in light industrial, grade A, and grade B office space resulted in low market shares post-merger, with only isolated nodes showing higher shares, which were mitigated by product and geographic constraints and customer countervailing power. The vertical relationship was not likely to result in foreclosure concerns, as asset management functions would be outsourced and competition from larger players would persist. No public interest concerns were identified....

Court Disposition

The proposed merger is approved unconditionally.

Orders

  • The merger between Capital Property Fund and Pangbourne Properties Limited is approved without conditions.