Deltrade 83 (Pty) Ltd v Property Management Business of Liberty Holdings Limited Known as LP Manco and Retail Property Management Business of JHI Properties Known as JHI Retail Division (020404) [2015] ZACT 33 (15 April 2015)

Deltrade 83 (Pty) Ltd v Property Management Business of Liberty Holdings Limited Known as LP Manco and Retail Property Management Business of JHI Properties Known as JHI Retail Division (020404) [2015] ZACT 33 (15 April 2015)

The Tribunal found that the proposed merger would not substantially prevent or lessen competition in the market for property management services, as Deltrade would continue to face significant competitors and there were no vertical foreclosure concerns. The removal of the right of first refusal clause addressed potential anti-competitive effects. Regarding public interest, the Tribunal determined that employment concerns were adequately addressed by the merging parties' undertaking of a two-year moratorium on merger-specific retrenchments from the approval date and reasonable notification to employees within three months. The Tribunal accepted the merging parties' explanation regarding...

Citation
[2015] ZACT 33
Parties
Applicant: Deltrade 83 (Pty) Ltd; Respondent: Property Management Business of Liberty Holdings Limited Known as LP Manco; Respondent: Retail Property Management Business of JHI Properties Known as JHI Retail Division; Respondent: Competition Commission
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
15 April 2015
Case Number
020404
Procedural Posture
Merger Review / Reasons for Decision After Conditional Approval
Outcome
Merger conditionally approved subject to employment-related conditions.
Judges
N Manoim, F Tregenna, A Wessels
Legal Topics
Merger Control, Vertical Foreclosure, Public Interest Employment, Consultation Obligations
Competition Law Commercial and Corporate Merger Control Vertical Foreclosure Public Interest Employment Consultation Obligations

Case Brief

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Parties

Deltrade 83 (Pty) Ltd

Applicant

Property Management Business of Liberty Holdings Limited Known as LP Manco

Respondent

Retail Property Management Business of JHI Properties Known as JHI Retail Division

Respondent

Competition Commission

Respondent

Procedural Posture

Merger Review / Reasons for Decision After Conditional Approval

Legal Issues

  1. 1 Whether the proposed merger is likely to substantially prevent or lessen competition in the market for property management services.
  2. 2 Whether the merger raises public interest concerns, particularly regarding employment and consultation with employees.
  3. 3 Whether the right of first refusal clause in the Property Management Service Level Agreement raises competition concerns.

Ratio Decidendi

The Tribunal found that the proposed merger would not substantially prevent or lessen competition in the market for property management services, as Deltrade would continue to face significant competitors and there were no vertical foreclosure concerns. The removal of the right of first refusal clause addressed potential anti-competitive effects. Regarding public interest, the Tribunal determined that employment concerns were adequately addressed by the merging parties' undertaking of a two-year moratorium on merger-specific retrenchments from the approval date and reasonable notification to employees within three months. The Tribunal accepted the merging parties' explanation regarding...

Court Disposition

Merger conditionally approved subject to employment-related conditions.

Orders

  • The merger is approved subject to a two-year moratorium on merger-specific retrenchments from the approval date.
  • The merged firm must notify affected employees within three months of the approval date regarding potential retrenchments, specifying divisions and proposed numbers.