Capital Propfund (Pty) Ltd and Another v Knoxco 10 Properties (Pty) Ltd (LM091Oct21) [2022] ZACT 6 (17 March 2022)

Capital Propfund (Pty) Ltd and Another v Knoxco 10 Properties (Pty) Ltd (LM091Oct21) [2022] ZACT 6 (17 March 2022)

The Tribunal found that the proposed merger between Capital Propfund, Inospace, and Knoxco 10 Properties would not substantially prevent or lessen competition in the relevant market for industrial property in the Sandton/Randburg and Roodepoort nodes. Although the merged entity would have a post-merger market share of approximately 26.66%, the market remains competitive with other providers. The Tribunal addressed the Commission's concern regarding potential information exchange by imposing conditions prohibiting directors involved in the operations of the Fortress and Taurus Groups from serving on the joint venture's board and requiring non-disclosure undertakings to prevent the sharing...

Citation
[2022] ZACT 6
Parties
Applicant: Capital Propfund (Pty) Ltd; Applicant: Inospace (Pty) Ltd; Respondent: Knoxco 10 Properties (Pty) Ltd; Respondent: Competition Commission
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
17 March 2022
Case Number
LM091Oct21
Procedural Posture
Large Merger Review / Conditional Approval
Outcome
Merger conditionally approved subject to competition and public interest conditions.
Judges
Mondo Mazwai, Yasmin Carrim, Andreas Wessels
Legal Topics
Large Merger, Information Exchange, Public Interest, Black Ownership, Market Share Calculation
Competition Law Commercial and Corporate Large Merger Information Exchange Public Interest Black Ownership Market Share Calculation

Case Brief

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Parties

Capital Propfund (Pty) Ltd

Applicant

Inospace (Pty) Ltd

Applicant

Knoxco 10 Properties (Pty) Ltd

Respondent

Competition Commission

Respondent

Procedural Posture

Large Merger Review / Conditional Approval

Legal Issues

  1. 1 Whether the proposed merger will substantially prevent or lessen competition in the relevant market.
  2. 2 Whether the merger raises concerns regarding information exchange between joint venture partners.
  3. 3 Whether the transaction has any negative impact on public interest, including employment and black ownership.

Ratio Decidendi

The Tribunal found that the proposed merger between Capital Propfund, Inospace, and Knoxco 10 Properties would not substantially prevent or lessen competition in the relevant market for industrial property in the Sandton/Randburg and Roodepoort nodes. Although the merged entity would have a post-merger market share of approximately 26.66%, the market remains competitive with other providers. The Tribunal addressed the Commission's concern regarding potential information exchange by imposing conditions prohibiting directors involved in the operations of the Fortress and Taurus Groups from serving on the joint venture's board and requiring non-disclosure undertakings to prevent the sharing...

Court Disposition

Merger conditionally approved subject to competition and public interest conditions.

Orders

  • The merger is approved subject to the conditions set out in Annexure 'A', including the implementation of Chinese wall limitations and non-disclosure undertakings between the joint venture partners.
  • No directors involved in the operations of Fortress Group or Taurus Group's light industrial businesses may be appointed to the joint venture's board.