Government Employees Pension Fund v Trevenna Development Company (Pty) Ltd in respect of the Trevenna Building (017640) [2013] ZACT 98 (1 October 2013)
- Citation
- [2013] ZACT 98
- Status
- Order
- Jurisdiction
- South Africa
- Court
- Competition Tribunal
- Panel
- Andreas Wessels, Andiswa Ndoni, Mondo Mazwai
- Case number
- 017640
More details
- Court
- Competition Tribunal
- Panel
- Andreas Wessels, Andiswa Ndoni, Mondo Mazwai
- Case number
- 017640
On this page
Professional case brief
Research organized from the available case record
01
Holding and result
The Tribunal found that the merged entity's post-merger market share in the market for rentable A-Grade office space within a 5 km radius of the Trevenna Building would be less than 15%. Regardless of the precise market definition, this low market share means the transaction is unlikely to substantially prevent or lessen competition. The Tribunal also noted that there would be no adverse effect on employment or other public interest concerns. Accordingly, the merger was approved unconditionally.
Court disposition
Merger unconditionally approved.
Orders
- The merger between Government Employees Pension Fund and Trevenna Development Company (Pty) Ltd in respect of the Trevenna Building is approved unconditionally.
02
Material facts
Parties
Government Employees Pension Fund
Applicant Counsel: J S MaraisTrevenna Development Company (Pty) Ltd
RespondentAmounts and remedies
- Post Merger Market Share: 15
03
Procedural history
Posture
Merger Approval / Final Determination
04
Questions and positions
Legal issues
- 01
Whether the proposed acquisition of Trevenna's 49% share in the Trevenna Building by GEPF is likely to substantially prevent or lessen competition in the relevant market.
- 02
Whether the transaction raises any public interest concerns, including adverse effects on employment.
Party arguments
- Applicant
- The GEPF argued that the acquisition aligns with its investment strategy and mandate, presenting an opportunity to expand its property portfolio. It asserted that the transaction would not negatively impact competition or public interest, as the merged entity's market share would remain low and there would be no adverse effect on employment.
- Respondent
- Trevenna submitted that the transaction provides an opportunity to liquidate its interest in the target property. It concurred with the GEPF that the transaction would not result in competition concerns or negative public interest outcomes.
05
Court’s reasoning
Legal principles
- 01
Competition Act, 89 of 1998
A merger will only be prohibited if it is likely to substantially prevent or lessen competition in the relevant market.
- 02
Competition Act, 89 of 1998
Public interest factors, including the effect on employment, must be considered in merger assessments.
06
Ratio, limits and disposition
Ratio decidendi
The Tribunal found that the merged entity's post-merger market share in the market for rentable A-Grade office space within a 5 km radius of the Trevenna Building would be less than 15%. Regardless of the precise market definition, this low market share means the transaction is unlikely to substantially prevent or lessen competition. The Tribunal also noted that there would be no adverse effect on employment or other public interest concerns. Accordingly, the merger was approved unconditionally.
Obiter and limits
- The Tribunal did not find it necessary to take a definitive view on the exact scope of the product or geographic market, as the outcome would be the same under any reasonable delineation.
- The merging parties confirmed that the transaction would not negatively affect employment, and no other public interest concerns were raised.
Court disposition
Merger unconditionally approved.
- The merger between Government Employees Pension Fund and Trevenna Development Company (Pty) Ltd in respect of the Trevenna Building is approved unconditionally.
Source and reliance status
Competition Tribunal
This page organises the available record for research. Confirm quotations, current status, and subsequent treatment against the official source before relying on the case.
Judgment reading view
Judgment text
The complete available source text.
Competition Tribunal
Order
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case No.: 017640
In the matter between
Government Employees Pension Fund ................................................Acquiring Firm
And
Trevenna Development Company (Pty) Ltd
Panel
Andreas Wessels (Presiding Member)
Andiswa Ndoni (Tribunal Member)
Mondo Mazwai (Tribunal Member)
Heard on
25 September 2013
Order issued on
25 September 2013
Reasons issued on :
01 October 2013 Decision
in respect of the Trevenna Building Target Firm
Approval
[1] On 25 September 2013, the Competition Tribunal (“Tribunal”) unconditionally approved the merger between the Government Employees Pension Fund (“the GEPF”) and Trevenna Development Company (Pty) Ltd (“Trevenna”) in respect of the Trevenna Building.
[2] The reasons for approving the proposed transaction follow.
Parties to transaction
[3] The primary acquiring firm is the GEPF. The GEPF was established in terms of the Government Service Pension Act, 57 of 1973, which has been repealed. It continues to exist as a juristic person by virtue of the Government Employees Pension Law, 1996. The GEPF is a pension fund and has as its purpose the administration and management of pensions and other benefits for its members. The GEPF’s funds are invested in a variety of assets, including property.1 Of relevance to the competition assessment of the proposed transaction is its investment in office property. The investment of
the GEPF’s assets is managed by the Public Investment Corporation SOC Limited (“the PIC”) in terms of an investment mandate. The PIC manages the equity, bonds, money market and property portfolios of the GEPF.
[4] The target property is the Trevenna Building. The GEPF and Trevenna are the registered co-owners of the Trevenna Building. Trevenna is a property development and investment company. Trevenna hols a 49% undivided share and the GEPF holds a 51% undivided share in the immovable property and letting enterprise described as Erf 89 Trevenna Township and Portion 479 of the farm Elandspoort no. 357 (hereinafter referred to as “the target property”). According to the Commission’s findings, the target property is an A-Grade office property development in Sunnyside, Pretoria.
Proposed transaction and rationale
[5] In terms of the proposed transaction the GEPF will acquire from Trevenna as a going concern a 49% undivided share in the target property and letting enterprise. On implementation of the proposed transaction, the GEPF will have sole control of the target property.
[6] The GEPF submitted that the target property falls within the strategy and investment mandate of the GEPF and this transaction presents an opportunity for the GEPF to grow the size and value of its property portfolio. Trevenna, on the other hand, submitted that the proposed transaction presents an opportunity to liquidate its interest in the target property.
Competition assessment
[7] The activities of the merging parties overlap with regards to rentable office property. The Commission defined the relevant market as the market for the provision of rentable A-Grade office space within a 5 km radius from the target property, which geographic area includes Sunnyside, Hatfield, Arcadia and the Pretoria CBD. The merged entity will have an estimated post-merger market share of less than 15% in such market.
[8] However, there is no need for us in this case to take a definitive view on the exact scope of either the product or the geographic market. The merged entity’s postmerger market shares remain low regardless of the precise market delineation.2 We therefore conclude that the proposed transaction is unlikely to raise competition concerns in any relevant market.
Public interest
[9] The merging parties confirmed that the proposed transaction will have no adverse effect on employment3 and the proposed transaction raises no other public interest concerns.
CONCLUSION
[10] We approve the merger unconditionally.
Andreas Wessels
01 October 2013
DATE
Andiswa Ndoni and Mondo Mazwai concurring
Tribunal researcher: Caroline Sserufusa
For the merging parties: J S Marais of Adams & Adams
For the Commission: Lana Norton
1See pages 16, 36 and 37 of the merger record.
2See merger record pages 40 to 44.
3See merger record pages 6 and 45.
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