Commercial Property Finance Division of ABSA Bank Limited and Equity Estates (Pty) Ltd (17/LM/Feb06) [2006] ZACT 42 (19 May 2006)

Commercial Property Finance Division of ABSA Bank Limited and Equity Estates (Pty) Ltd (17/LM/Feb06) [2006] ZACT 42 (19 May 2006)

The Tribunal found that the merger would not result in a substantial lessening or prevention of competition in the relevant markets for grade A office space in Woodmead, Sandton, and Bryanston. The combined post-merger market shares are low and do not raise competition concerns. The geographic market is local and node-based, and the merged entity will continue to face competition from several major property owners. There are no significant vertical integration issues, as ABSA will continue to rent office space from other owners and has no incentive to exclude competitors. The transaction does not negatively affect employment, as all employees will be transferred to MRX Holdings on the...

Citation
[2006] ZACT 42
Parties
Applicant: Commercial Property Finance Division of ABSA Bank Limited; Respondent: Equity Estates (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
19 May 2006
Case Number
17/LM/Feb06
Procedural Posture
Large Merger / Merger Clearance Decision
Outcome
Merger approved without conditions.
Judges
Y. Carrim, D Lewis, M Holden
Legal Topics
Large Merger Review, Market Definition, Horizontal Overlap, Vertical Integration, Public Interest
Competition Law Commercial and Corporate Large Merger Review Market Definition Horizontal Overlap Vertical Integration Public Interest

Case Brief

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Parties

Commercial Property Finance Division of ABSA Bank Limited

Applicant

Equity Estates (Pty) Ltd

Respondent

Procedural Posture

Large Merger / Merger Clearance Decision

Legal Issues

  1. 1 Whether the proposed merger will substantially lessen or prevent competition in the relevant markets.
  2. 2 Whether the transaction raises any significant public interest concerns.
  3. 3 Whether there are any vertical integration issues resulting from the merger.

Ratio Decidendi

The Tribunal found that the merger would not result in a substantial lessening or prevention of competition in the relevant markets for grade A office space in Woodmead, Sandton, and Bryanston. The combined post-merger market shares are low and do not raise competition concerns. The geographic market is local and node-based, and the merged entity will continue to face competition from several major property owners. There are no significant vertical integration issues, as ABSA will continue to rent office space from other owners and has no incentive to exclude competitors. The transaction does not negatively affect employment, as all employees will be transferred to MRX Holdings on the...

Court Disposition

Merger approved without conditions.

Orders

  • The merger between the Commercial Property Finance Division of ABSA Bank Limited and Equity Estates (Pty) Ltd is approved.
  • No conditions are imposed on the approval.