CBD Investments (Pty) Ltd v Rebosis Property Fund Limited, Ascension Properties (Pty) Ltd, Main Street 1119 (Pty) Ltd and Cape Horizon Properties 125 (Pty) Ltd in respect of a portfolio of 22 Property Rental Enterprises (LM103OCT23) [2024] ZACT 34 (10 January 2024)
The Tribunal found that the proposed merger would not result in a significant lessening of competition in the relevant markets for A-Grade office space in the Johannesburg CBD and light industrial space in Selby and surrounding nodes, as the merged entity's market shares would remain below 10% and competitive constraints would persist. The Tribunal accepted the Commission's assessment that public interest concerns regarding employment and HDP ownership were adequately addressed by the merger conditions, including the transfer of employees under section 197 of the Labour Relations Act and the establishment of a B-BBEE Newco to ensure continued HDP participation. The merger was...
- Citation
- [2024] ZACT 34
- Parties
- Applicant: CBD Investments (Pty) Ltd; Respondent: Rebosis Property Fund Limited; Respondent: Ascension Properties (Pty) Ltd; Respondent: Main Street 1119 (Pty) Ltd; Respondent: Cape Horizon Properties 125 (Pty) Ltd
- Court
- Competition Tribunal
- Jurisdiction
- South Africa
- Judgment Date
- 10 January 2024
- Case Number
- LM103OCT23
- Procedural Posture
- Large Merger / Conditional Approval
- Outcome
- Merger conditionally approved subject to public interest undertakings.
- Judges
- AW Wessels, L Mncube, G Budlender
- Legal Topics
- Large Merger Review, Public Interest Conditions, Horizontal Overlap, Hdp Ownership, Section 197 Transfer, Market Definition
Case Brief
Summary, issues, holding and outcome
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Parties
CBD Investments (Pty) Ltd
Applicant
Rebosis Property Fund Limited
Respondent
Ascension Properties (Pty) Ltd
Respondent
Main Street 1119 (Pty) Ltd
Respondent
Cape Horizon Properties 125 (Pty) Ltd
Respondent
Procedural Posture
Large Merger / Conditional Approval
Legal Issues
- 1 Whether the proposed merger will substantially prevent or lessen competition in the relevant markets.
- 2 Whether the transaction will have adverse effects on employment or public interest factors, including HDP ownership.
- 3 Whether the merger conditions adequately address public interest concerns.
Ratio Decidendi
The Tribunal found that the proposed merger would not result in a significant lessening of competition in the relevant markets for A-Grade office space in the Johannesburg CBD and light industrial space in Selby and surrounding nodes, as the merged entity's market shares would remain below 10% and competitive constraints would persist. The Tribunal accepted the Commission's assessment that public interest concerns regarding employment and HDP ownership were adequately addressed by the merger conditions, including the transfer of employees under section 197 of the Labour Relations Act and the establishment of a B-BBEE Newco to ensure continued HDP participation. The merger was...
Court Disposition
Merger conditionally approved subject to public interest undertakings.
Orders
- CBD Investments shall implement an HDP transaction within 18 months of merger implementation, allotting an indirect interest in CBD Investments to HDP shareholders via B-BBEE Newco.
- HDP shareholders must hold the indirect ownership for a minimum period as specified in the conditions, with no obligation for debt funding.
Full Case Text
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