Fortress Income Fund Limited v Capital Property Fund Limited (LM064Jul15) [2015] ZACT 99 (2 November 2015)

Fortress Income Fund Limited v Capital Property Fund Limited (LM064Jul15) [2015] ZACT 99 (2 November 2015)

The Tribunal found that although there were horizontal overlaps in nine markets, high market shares were only identified in three. The Commission's market share calculations were potentially overstated, as they did not account for unlisted property owners. Furthermore, sufficient vacant rentable space and prospective developments existed in the affected markets, mitigating any anti-competitive concerns. The Tribunal concurred with the Commission's assessment that the merger would not substantially prevent or lessen competition. No adverse public interest issues, including employment, were identified. The merger was therefore approved unconditionally.

Citation
[2015] ZACT 99
Parties
Applicant: Fortress Income Fund Limited; Respondent: Capital Property Fund Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
2 November 2015
Case Number
LM064Jul15
Procedural Posture
Merger Control / Approval
Outcome
Merger approved unconditionally.
Judges
Norman Manoim, Medi Mokuena, lmraan Valodia
Legal Topics
Merger Control, Horizontal Overlap, Market Share Analysis, Public Interest, Real Estate Investment Trusts
Competition Law Commercial and Corporate Merger Control Horizontal Overlap Market Share Analysis Public Interest Real Estate Investment Trusts

Case Brief

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Parties

Fortress Income Fund Limited

Applicant

Capital Property Fund Limited

Respondent

Procedural Posture

Merger Control / Approval

Legal Issues

  1. 1 Whether the proposed merger between Fortress and Capital would substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the merger raises any public interest concerns, including adverse impact on employment.

Ratio Decidendi

The Tribunal found that although there were horizontal overlaps in nine markets, high market shares were only identified in three. The Commission's market share calculations were potentially overstated, as they did not account for unlisted property owners. Furthermore, sufficient vacant rentable space and prospective developments existed in the affected markets, mitigating any anti-competitive concerns. The Tribunal concurred with the Commission's assessment that the merger would not substantially prevent or lessen competition. No adverse public interest issues, including employment, were identified. The merger was therefore approved unconditionally.

Court Disposition

Merger approved unconditionally.

Orders

  • The proposed transaction between Fortress Income Fund Limited and Capital Property Fund Limited is approved without conditions.