Emira Property Fund and Freestone Property Holdings Ltd (02/LM/Jan07) [2007] ZACT 28; [2007] 1 CPLR 151 (CT) (26 April 2007)

Emira Property Fund and Freestone Property Holdings Ltd (02/LM/Jan07) [2007] ZACT 28; [2007] 1 CPLR 151 (CT) (26 April 2007)

The Tribunal found that the merger between Emira Property Fund and Freestone Property Holdings Ltd resulted in both horizontal and vertical overlaps in the property sector, but the increments in market share were generally low except for Grade B office space in Sandton. The Tribunal expressed skepticism about the reliability of Sapoa's market classifications for antitrust purposes, noting significant overlaps in rental prices between Grade A and B properties. The Tribunal concluded that rental prices are constrained by informed tenants, independent brokers, and a 5% vacancy rate, with additional new office space being developed. There were no public interest concerns identified....

Citation
[2007] ZACT 28
Parties
Applicant: Emira Property Fund; Respondent: Freestone Property Holdings Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
26 April 2007
Case Number
02/LM/Jan07
Procedural Posture
Merger Application / Merger Approval
Outcome
Merger unconditionally approved.
Judges
N Manoim, M Holden, M Mokuena
Legal Topics
Horizontal Merger, Market Definition, Vertical Integration, Unconditional Approval
Competition Law Commercial and Corporate Horizontal Merger Market Definition Vertical Integration Unconditional Approval

Case Brief

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Parties

Emira Property Fund

Applicant

Freestone Property Holdings Ltd

Respondent

Procedural Posture

Merger Application / Merger Approval

Legal Issues

  1. 1 Whether the proposed merger between Emira Property Fund and Freestone Property Holdings Ltd is likely to substantially lessen or prevent competition in any relevant market.
  2. 2 Whether the market definitions and share calculations based on Sapoa data are reliable for antitrust analysis.
  3. 3 Whether there are any public interest concerns arising from the merger.

Ratio Decidendi

The Tribunal found that the merger between Emira Property Fund and Freestone Property Holdings Ltd resulted in both horizontal and vertical overlaps in the property sector, but the increments in market share were generally low except for Grade B office space in Sandton. The Tribunal expressed skepticism about the reliability of Sapoa's market classifications for antitrust purposes, noting significant overlaps in rental prices between Grade A and B properties. The Tribunal concluded that rental prices are constrained by informed tenants, independent brokers, and a 5% vacancy rate, with additional new office space being developed. There were no public interest concerns identified....

Court Disposition

Merger unconditionally approved.

Orders

  • The merger between Emira Property Fund and Freestone Property Holdings Ltd is approved without conditions.