Cubisol Investments 3 (Pty) Ltd v Retail Letting Enterprise known as Lonehill Shopping Centre owned by Lonehill Shopping Centre (Pty) Ltd (LM114Sep16) [2016] ZACT 104 (12 November 2016)
- Citation
- [2016] ZACT 104
- Status
- Judgment
- Jurisdiction
- South Africa
- Court
- Competition Tribunal
- Panel
- AW Wessels, Mondo Mazwai, Andiswa Ndoni
- Case number
- LM114Sep16
More details
- Court
- Competition Tribunal
- Panel
- AW Wessels, Mondo Mazwai, Andiswa Ndoni
- Case number
- LM114Sep16
On this page
Professional case brief
Research organized from the available case record
01
Holding and result
The Tribunal found that although the merging parties operate in the same product market—rentable space in convenience centres—there is no geographic overlap between the target property and the acquiring group's existing properties. The distances between the properties are significant, and therefore, the transaction does not raise competition concerns. Furthermore, the merging parties confirmed that the transaction would have no adverse effect on employment, and no other public interest issues were identified. As a result, the Tribunal concluded that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market and raises no public interest concerns. The merger was approved unconditionally.
Court disposition
The proposed merger is approved unconditionally.
Orders
- The proposed transaction between Cubisol Investments 3 (Pty) Ltd and the retail letting enterprise known as Lonehill Shopping Centre owned by Lonehill Shopping Centre (Pty) Ltd is approved without conditions.
02
Material facts
Parties
Cubisol Investments 3 (Pty) Ltd
Applicant Counsel: Roxanne KerRetail Letting Enterprise known as Lonehill Shopping Centre owned by Lonehill Shopping Centre (Pty) Ltd
RespondentCompetition Commission
Respondent Counsel: Zintle Siyo03
Procedural history
Posture
Merger Control / Approval
04
Questions and positions
Legal issues
- 01
Whether the proposed acquisition of Lonehill Shopping Centre by Cubisol Investments 3 (Pty) Ltd is likely to substantially prevent or lessen competition in the market for rentable space in convenience centres.
- 02
Whether the proposed transaction raises any public interest concerns, including adverse effects on employment.
Party arguments
- Applicant
- Cubisol Investments 3 (Pty) Ltd argued that the acquisition would allow it to grow its property portfolio and that there is no significant geographic overlap between its existing properties and the target property. The applicant asserted that the transaction would not negatively impact competition or employment.
- Respondent
- The Competition Commission submitted that the merging parties' activities overlap in the provision of rentable space in retail property, specifically convenience centres, but that there is no geographic overlap. The Commission concluded that the transaction is unlikely to substantially prevent or lessen competition and that there are no adverse public interest effects, including on employment.
05
Court’s reasoning
Legal principles
- 01
Section 12A(1)(a) of the Competition Act, 89 of 1998
A merger may only be prohibited if it is likely to substantially prevent or lessen competition in any relevant market.
- 02
Section 12A(1)(b) of the Competition Act, 89 of 1998
Public interest considerations, including the effect on employment, must be assessed in merger proceedings.
06
Ratio, limits and disposition
Ratio decidendi
The Tribunal found that although the merging parties operate in the same product market—rentable space in convenience centres—there is no geographic overlap between the target property and the acquiring group's existing properties. The distances between the properties are significant, and therefore, the transaction does not raise competition concerns. Furthermore, the merging parties confirmed that the transaction would have no adverse effect on employment, and no other public interest issues were identified. As a result, the Tribunal concluded that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market and raises no public interest concerns. The merger was approved unconditionally.
Obiter and limits
- The Tribunal noted that the merging parties' confirmation regarding employment effects was supported by the merger record.
- No other public interest concerns, such as effects on small businesses or particular sectors, were raised or identified in this matter.
Court disposition
The proposed merger is approved unconditionally.
- The proposed transaction between Cubisol Investments 3 (Pty) Ltd and the retail letting enterprise known as Lonehill Shopping Centre owned by Lonehill Shopping Centre (Pty) Ltd is approved without conditions.
Source and reliance status
Competition Tribunal
This page organises the available record for research. Confirm quotations, current status, and subsequent treatment against the official source before relying on the case.
Judgment reading view
Judgment text
The complete available source text.
Competition Tribunal
Judgment
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case No: LM114Sep16
In the matter between:
CUBISOL INVESTMENTS 3 (PTY) LTD Primary Acquiring Firm
and
THE
RETAIL LETTING
ENTERPRISE
KNOWN AS
LONEHILL
SHOPPING CENTRE OWNED
BY
LONEHILL
SHOPPING CENTRE (PTY) LTD Primary
Target Firm
Panel
: AW Wessels (Presiding Member)
: Mondo Mazwai (Tribunal Member)
: Andiswa Ndoni (Tribunal Member)
Heard on
: 09 November 2016
Order Issued on
: 09 November 2016
Reasons Issued on : 12 November 2016
Reasons for Decision
Approval
[1] On 09 November 2016, the Competition Tribunal ("Tribunal") approved the proposed transaction between Cubisol Investments 3 (Pty) Ltd and the retail letting enterprise known as Lonehill Shopping Centre owned by Lonehill Shopping Centre (Pty) Ltd.
[2] The reasons for approving the proposed transaction follow.
Parties to proposed transaction
Primary acquiring firm
[3] The primary acquiring firm is Cubisol Investments 3 (Pty) Ltd “Cubisol 3"), a company incorporated in accordance with the laws of the Republic of South Africa.
[4] Cubisol 3 is controlled by Cubisol Holdings (Pty) Ltd ("Cubisol Holdings"). Cubisol Holdings is jointly controlled by Road Freight and Logistics Industry Provident Fund, Property Opportunity Fund Trust and K2015442434 (Pty) Ltd. The abovementioned firms will be referred to as the "Acquiring Group".
[5] The Acquiring Group is a property investment company with a diversified portfolio of commercial and retail properties throughout South Africa. The retail properties of the Acquiring Group that are situated in Gauteng are relevant to the competition assessment of the proposed transaction.
Primary target firm
[6] The primary target firm is Lonehill Shopping Centre (Pty) Ltd (“Lonehill") in respect of the retail letting enterprise known as Lonehill Shopping Centre ("the Target Property"), a community shopping centre.
[7] The Target Property is controlled by Lonehill, a company incorporated in accordance with the laws of the Republic of South Africa. Lonehill is jointly controlled in equal share by Fairway Enterprises CC and Century Property Developments (Pty) Ltd.
Proposed transaction and rationale
[8] In terms of the Sale of Letting Enterprise Agreement, Cubisol 3 intends to acquire the Target Property from Lonehill. Post-merger Cubisol 3 will have sole control of the Target Property.
[9] Cubisol 3 wishes to grow its property portfolio.
[10] The shareholders in Lonehill wish to realise their investment in the Target Property.
Impact on competition
[11] The Commission considered the activities of the merging parties and found that there was a product overlap in the provision of rentable space in retail property, specifically with regards to retails pace in convenience centres.
[12] From a geographic market perspective, the Target Property is located in Lonehill, Sandton in the Gauteng province. The Acquiring Group owns the following convenience centres in Gauteng: Shoshanguve Plaza - Shoshanguve, Pretoria (a distance of 76 km from the Target property); Mayfield Square - Daveyton, Benoni (58 km from the Target property); and Mountain View - Northcliff, Johannesburg (22 km from the Target property).
[13] Given the above, the Commission concluded that the proposed transaction is unlikely to substantially prevent or lessen competition in the market for the provision of rentable space in convenience centres since there is no geographic overlap between the activities of the merging parties.
[14] We concur with the Commission that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market.
Public interest
[15] The merging parties confirmed that the proposed transaction will have no adverse effect on employment.[1]
[16] The proposed transaction further raises no other public interest concerns.
Conclusion
[17] In light of the above, we conclude that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market. In addition, no public interest issues arise from the proposed transaction. Accordingly, we approve the proposed transaction unconditionally.
12 November 2016
DATE
______
Mr AW Wessels
Mrs Mondo Mazwai and Ms Andiswa Ndoni concurring
Case Manager: Kameel Pancham
For the merging parties: Roxanne Ker of Walkers Inc.
For the Commission: Zintle Siyo
[1] Inter alia page 5 of the Merger Record.
Case-aware research
Ask AI about this case
The judgment and available research above are public. New questions open in a separate private conversation grounded in this case.