Community Property Company (Pty) Ltd v Luvon Investments (Pty) Ltd and Twin City (Pty) Ltd (LM180Feb23) [2023] ZACT 47; [2023] 2 CPLR 19 (CT) (18 May 2023)

Community Property Company (Pty) Ltd v Luvon Investments (Pty) Ltd and Twin City (Pty) Ltd (LM180Feb23) [2023] ZACT 47; [2023] 2 CPLR 19 (CT) (18 May 2023)

The Tribunal found that the proposed merger does not result in any significant horizontal overlap in the provision of comparative retail centres within the relevant geographic market, as the nearest comparative centre owned by the acquiring group is outside the 15km radius. The exclusivity clause in favour of Pick n Pay was identified as a potential competition concern, but the merging parties agreed to its removal, which was imposed as a condition of approval. The Tribunal accepted the unequivocal undertaking that there would be no negative employment effects and noted that the transaction would promote a greater spread of historically disadvantaged persons ownership. No other public...

Citation
[2023] ZACT 47
Parties
Applicant: Community Property Company (Pty) Ltd; Respondent: Luvon Investments (Pty) Ltd; Respondent: Twin City (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
18 May 2023
Case Number
LM180Feb23
Procedural Posture
Merger Approval / Reasons for Decision
Outcome
Merger conditionally approved subject to the removal of the exclusivity clause in the lease agreement.
Judges
Geoff Budlender, Thando Vilakazi, Fiona Tregenna
Legal Topics
Large Merger, Retail Property Market, Exclusivity Clauses, Public Interest, Employment Effects
Competition Law Commercial and Corporate Large Merger Retail Property Market Exclusivity Clauses Public Interest Employment Effects

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Parties

Community Property Company (Pty) Ltd

Applicant

Luvon Investments (Pty) Ltd

Respondent

Twin City (Pty) Ltd

Respondent

Procedural Posture

Merger Approval / Reasons for Decision

Legal Issues

  1. 1 Does the proposed merger substantially prevent or lessen competition in the relevant market?
  2. 2 Does the exclusivity clause in the lease agreement raise competition concerns?
  3. 3 Will the merger have any negative effects on employment or public interest?

Ratio Decidendi

The Tribunal found that the proposed merger does not result in any significant horizontal overlap in the provision of comparative retail centres within the relevant geographic market, as the nearest comparative centre owned by the acquiring group is outside the 15km radius. The exclusivity clause in favour of Pick n Pay was identified as a potential competition concern, but the merging parties agreed to its removal, which was imposed as a condition of approval. The Tribunal accepted the unequivocal undertaking that there would be no negative employment effects and noted that the transaction would promote a greater spread of historically disadvantaged persons ownership. No other public...

Court Disposition

Merger conditionally approved subject to the removal of the exclusivity clause in the lease agreement.

Orders

  • The merger is approved subject to the condition that the exclusivity clause in favour of Pick n Pay in the lease agreement for the Target Property is removed.
  • No job losses shall result from the implementation of the merger.