Fortress Income Fund Limited v Lodestone Reit Limited (LM103Sep16) [2016] ZACT 97; [2017] 1 CPLR 271 (CT) (7 December 2016)

Fortress Income Fund Limited v Lodestone Reit Limited (LM103Sep16) [2016] ZACT 97; [2017] 1 CPLR 271 (CT) (7 December 2016)

The Tribunal found that although there were horizontal overlaps in the provision of rentable space in light industrial property and retail convenience centres, the post-merger market shares were low and the market share accretion was minimal. In all geographic nodes except one, the merged entity's market share did not exceed 6.5%, and in the outlier node, it was 15.88% with a 5.05% accretion. In the industrial property market, no node exceeded a 23% market share or a 3% accretion. The presence of strong competitors in all relevant markets would constrain the merged entity's ability to prevent or lessen competition. No public interest concerns were identified. Accordingly, the merger was...

Citation
[2016] ZACT 97
Parties
Applicant: Fortress Income Fund Limited; Respondent: Lodestone Reit Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
7 December 2016
Case Number
LM103SEP16
Procedural Posture
Large Merger / Approval
Outcome
Merger approved without conditions.
Judges
Norman Manoim, Yasmin Carrim, Medi Mokuena
Legal Topics
Large Merger Review, Horizontal Overlap, Market Share Analysis, Public Interest, Retail Property Market, Industrial Property Market
Competition Law Commercial and Corporate Large Merger Review Horizontal Overlap Market Share Analysis Public Interest Retail Property Market Industrial Property Market

Case Brief

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Parties

Fortress Income Fund Limited

Applicant

Lodestone Reit Limited

Respondent

Procedural Posture

Large Merger / Approval

Legal Issues

  1. 1 Does the proposed merger between Fortress and Lodestone substantially prevent or lessen competition in the relevant markets?
  2. 2 Are there any public interest concerns arising from the transaction?

Ratio Decidendi

The Tribunal found that although there were horizontal overlaps in the provision of rentable space in light industrial property and retail convenience centres, the post-merger market shares were low and the market share accretion was minimal. In all geographic nodes except one, the merged entity's market share did not exceed 6.5%, and in the outlier node, it was 15.88% with a 5.05% accretion. In the industrial property market, no node exceeded a 23% market share or a 3% accretion. The presence of strong competitors in all relevant markets would constrain the merged entity's ability to prevent or lessen competition. No public interest concerns were identified. Accordingly, the merger was...

Court Disposition

Merger approved without conditions.

Orders

  • The large merger between Fortress Income Fund Limited and Lodestone Reit Limited is approved without conditions.