Cumulative Properties Ltd v Moolgem (Pty) Ltd (LM142Jul18) [2018] ZACT 69 (7 November 2018)

Cumulative Properties Ltd v Moolgem (Pty) Ltd (LM142Jul18) [2018] ZACT 69 (7 November 2018)

The Tribunal found that the proposed transaction would not substantially prevent or lessen competition in any of the relevant property markets, as post-merger market shares were low and the merged entity would continue to face competition from other market participants. However, the Tribunal accepted the Commission's concerns regarding the potential for the exchange of competitively sensitive information due to board appointments by the target group. The Tribunal approved the merger subject to conditions prohibiting the appointment of common directors and requiring the implementation of a confidentiality and information exchange policy. No adverse public interest concerns were identified.

Citation
[2018] ZACT 69
Parties
Applicant: Cumulative Properties Ltd; Respondent: Moolgem (Pty) Ltd; Respondent: Competition Commission
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
7 November 2018
Case Number
LM142Jul18
Procedural Posture
Merger Control / Conditional Approval of Merger
Outcome
Merger conditionally approved subject to confidentiality and director appointment conditions.
Judges
Norman Manoim, Andiswa Ndoni, Halton Cheadle
Legal Topics
Merger Control, Information Exchange, Competition Act 89 of 1998, Confidentiality Policy
Competition Law Commercial and Corporate Merger Control Information Exchange Competition Act 89 of 1998 Confidentiality Policy

Case Brief

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Parties

Cumulative Properties Ltd

Applicant

Moolgem (Pty) Ltd

Respondent

Competition Commission

Respondent

Procedural Posture

Merger Control / Conditional Approval of Merger

Legal Issues

  1. 1 Whether the proposed acquisition of control over Moolgem by Cumulative Properties Ltd is likely to substantially prevent or lessen competition in the affected property markets.
  2. 2 Whether the transaction raises concerns regarding the exchange of competitively sensitive information between competitors.
  3. 3 Whether any public interest concerns arise from the proposed transaction.

Ratio Decidendi

The Tribunal found that the proposed transaction would not substantially prevent or lessen competition in any of the relevant property markets, as post-merger market shares were low and the merged entity would continue to face competition from other market participants. However, the Tribunal accepted the Commission's concerns regarding the potential for the exchange of competitively sensitive information due to board appointments by the target group. The Tribunal approved the merger subject to conditions prohibiting the appointment of common directors and requiring the implementation of a confidentiality and information exchange policy. No adverse public interest concerns were identified.

Court Disposition

Merger conditionally approved subject to confidentiality and director appointment conditions.

Orders

  • The proposed transaction is approved subject to the conditions set out in Annexure A, including restrictions on board appointments and requirements for confidentiality undertakings.
  • The merging parties must develop and submit a confidentiality and information exchange policy to the Commission within three months of the approval date.