Fortress Income 2 (Pty) Ltd v The immovable proprietary and property letting Enterprises of: (016519) [2013] ZACT 52 (13 June 2013)

Fortress Income 2 (Pty) Ltd v The immovable proprietary and property letting Enterprises of: (016519) [2013] ZACT 52 (13 June 2013)

The Tribunal found that the proposed transaction would not substantially prevent or lessen competition in any relevant market. The geographic and product market overlaps identified by the Commission were not significant, as the customer bases and income brackets of the affected retail centres differ, and alternative retail centres are available in both Nelspruit and Alberton. The merged entity's market shares post-transaction are low (7.6% in Nelspruit and 2.6% in Alberton). Regarding public interest, the Tribunal determined that imposing a condition to remove the exclusivity clause in the Nelspruit Plaza lease would be ineffectual, as there is no available retail space for new tenants...

Citation
[2013] ZACT 52
Parties
Applicant: Fortress Income 2 (Pty) Ltd; Respondent: Resilient Properties Proprietary and Diversified Properties 2 (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
13 June 2013
Case Number
016519
Procedural Posture
Merger Application / Order Granting Unconditional Approval
Outcome
Merger approved unconditionally.
Judges
N Manoim, T Madima, A Ndoni
Legal Topics
Merger Control, Market Definition, Public Interest, Exclusivity Clause, Retail Property Merger
Competition Law Merger Control Market Definition Public Interest Exclusivity Clause Retail Property Merger

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Parties

Fortress Income 2 (Pty) Ltd

Applicant

Resilient Properties Proprietary and Diversified Properties 2 (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Order Granting Unconditional Approval

Legal Issues

  1. 1 Whether the proposed acquisition of six retail properties by Fortress Income 2 (Pty) Ltd is likely to substantially prevent or lessen competition in any relevant market.
  2. 2 Whether any public interest concerns, specifically relating to exclusivity clauses affecting SMMEs, warrant the imposition of conditions on the merger approval.

Ratio Decidendi

The Tribunal found that the proposed transaction would not substantially prevent or lessen competition in any relevant market. The geographic and product market overlaps identified by the Commission were not significant, as the customer bases and income brackets of the affected retail centres differ, and alternative retail centres are available in both Nelspruit and Alberton. The merged entity's market shares post-transaction are low (7.6% in Nelspruit and 2.6% in Alberton). Regarding public interest, the Tribunal determined that imposing a condition to remove the exclusivity clause in the Nelspruit Plaza lease would be ineffectual, as there is no available retail space for new tenants...

Court Disposition

Merger approved unconditionally.

Orders

  • The merger between Fortress Income 2 (Pty) Ltd and the six retail properties is approved without conditions.