Growthpoint Properties Ltd v Design Square (Pty) Ltd (75/LM/Nov10) [2011] ZACT 19 (7 April 2011)

Growthpoint Properties Ltd v Design Square (Pty) Ltd (75/LM/Nov10) [2011] ZACT 19 (7 April 2011)

The Tribunal found that the merger between Growthpoint Properties Limited and Design Square (Pty) Ltd would not substantially prevent or lessen competition in the relevant markets. The parties' properties are sufficiently differentiated, and the overlap in rentable A-grade office space is minimal. The market is fragmented, with low barriers to entry and low post-merger market shares. The joint management structure, while facilitating cooperation, would not enable effective anti-competitive coordination due to the nature of rental agreements and lease durations. There are no public interest concerns, as the transaction will not result in redundancies or negative effects for tenants....

Citation
[2011] ZACT 19
Parties
Applicant: Growthpoint Properties Limited; Respondent: Design Square (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
7 April 2011
Case Number
75/LM/Nov10
Procedural Posture
Large Merger Review / Approval
Outcome
Merger approved without conditions.
Judges
Norman Manoim, Yasmin Carrim, Merle Holden
Legal Topics
Large Merger, Horizontal Merger, Market Definition, Public Interest, Joint Management, Market Share Analysis
Competition Law Commercial and Corporate Large Merger Horizontal Merger Market Definition Public Interest Joint Management Market Share Analysis

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Parties

Growthpoint Properties Limited

Applicant

Design Square (Pty) Ltd

Respondent

Procedural Posture

Large Merger Review / Approval

Legal Issues

  1. 1 Whether the proposed merger between Growthpoint Properties Limited and Design Square (Pty) Ltd would substantially prevent or lessen competition in the relevant markets.
  2. 2 Whether the joint management structure post-merger could facilitate anti-competitive coordination in other properties owned by the parties.
  3. 3 Whether there are any public interest concerns arising from the merger.

Ratio Decidendi

The Tribunal found that the merger between Growthpoint Properties Limited and Design Square (Pty) Ltd would not substantially prevent or lessen competition in the relevant markets. The parties' properties are sufficiently differentiated, and the overlap in rentable A-grade office space is minimal. The market is fragmented, with low barriers to entry and low post-merger market shares. The joint management structure, while facilitating cooperation, would not enable effective anti-competitive coordination due to the nature of rental agreements and lease durations. There are no public interest concerns, as the transaction will not result in redundancies or negative effects for tenants....

Court Disposition

Merger approved without conditions.

Orders

  • The large merger between Growthpoint Properties Limited and Design Square (Pty) Ltd is approved without conditions.