Grindrod Property Holdings Limited v SA Corporate Real Estate (SACREL) in relation to various rental enterprises belonging to respective wholly-owned subsidiaries of SACREL (LM121Sep20) [2020] ZACT 43 (16 November 2020)

Grindrod Property Holdings Limited v SA Corporate Real Estate (SACREL) in relation to various rental enterprises belonging to respective wholly-owned subsidiaries of SACREL (LM121Sep20) [2020] ZACT 43 (16 November 2020)

The Tribunal found that both Grindrod Property Holdings and SACREL are active in the market for industrial properties in Durban, but the merged entity's market share post-transaction would remain below 10%, with only a minor accretion of approximately 1.5%. The presence of competing industrial properties in the area ensures that the merged entity cannot exercise market power. No substantial lessening or prevention of competition would result from the transaction. Furthermore, the transaction does not raise any public interest concerns, as there are no employees affected and no negative impact on employment terms or conditions. The Tribunal therefore approved the transaction unconditionally.

Citation
[2020] ZACT 43
Parties
Applicant: Grindrod Property Holdings Limited; Respondent: SA Corporate Real Estate (SACREL) and its wholly-owned subsidiaries: Dune Lark Investments Proprietary Limited, Blue Heron Proprietary Limited, Grey Heron Investments Proprietary Limited, Rock Kestrel Investments Proprietary Limited, Wood Ibis Investments Proprietary Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
16 November 2020
Case Number
LM121Sep20
Procedural Posture
Merger Control / Reasons for Unconditional Approval of Merger
Outcome
The proposed transaction is approved unconditionally.
Judges
Y Carrim, E Daniels, T Vilakazi
Legal Topics
Merger Control, Substantial Lessening of Competition, Public Interest, Industrial Property Market, Employment Effects
Competition Law Commercial and Corporate Merger Control Substantial Lessening of Competition Public Interest Industrial Property Market Employment Effects

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Parties

Grindrod Property Holdings Limited

Applicant

SA Corporate Real Estate (SACREL) and its wholly-owned subsidiaries: Dune Lark Investments Proprietary Limited, Blue Heron Proprietary Limited, Grey Heron Investments Proprietary Limited, Rock Kestrel Investments Proprietary Limited, Wood Ibis Investments Proprietary Limited

Respondent

Procedural Posture

Merger Control / Reasons for Unconditional Approval of Merger

Legal Issues

  1. 1 Does the proposed acquisition of rental enterprises by Grindrod Property Holdings from SACREL and its subsidiaries substantially prevent or lessen competition in the relevant industrial property market in Durban?
  2. 2 Does the transaction raise any public interest concerns, including employment effects?

Ratio Decidendi

The Tribunal found that both Grindrod Property Holdings and SACREL are active in the market for industrial properties in Durban, but the merged entity's market share post-transaction would remain below 10%, with only a minor accretion of approximately 1.5%. The presence of competing industrial properties in the area ensures that the merged entity cannot exercise market power. No substantial lessening or prevention of competition would result from the transaction. Furthermore, the transaction does not raise any public interest concerns, as there are no employees affected and no negative impact on employment terms or conditions. The Tribunal therefore approved the transaction unconditionally.

Court Disposition

The proposed transaction is approved unconditionally.

Orders

  • The merger between Grindrod Property Holdings Limited and the rental enterprises of SACREL and its subsidiaries is approved without conditions.