Growthpoint Properties Ltd v Liberty Group Ltd (20/LM/Mar12) [2012] ZACT 55; [2012] 2 CPLR 455 (CT) (18 July 2012)

Growthpoint Properties Ltd v Liberty Group Ltd (20/LM/Mar12) [2012] ZACT 55; [2012] 2 CPLR 455 (CT) (18 July 2012)

The Tribunal found that the merger would not substantially lessen competition in the relevant market, as Growthpoint does not own other regional shopping centres in the Alberton node. However, the exclusivity clause in the lease agreement with Shoprite Checkers raised a public interest concern under section 12A(3)(c) of the Competition Act, as it could restrict access for small businesses. The Tribunal approved the merger subject to conditions requiring Growthpoint to negotiate the removal of the exclusivity clause and to report to the Commission on compliance. No significant adverse effects on employment were anticipated.

Citation
[2012] ZACT 55
Parties
Applicant: Growthpoint Properties Limited; Respondent: Liberty Group Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
18 July 2012
Case Number
20/LM/Mar12
Procedural Posture
Merger Application / Approval
Outcome
Merger approved subject to conditions.
Judges
Andreas Wessels, Medi Mokuena, Takalani Madima
Legal Topics
Merger Control, Public Interest Conditions, Exclusivity Clauses, Retail Property
Competition Law Commercial and Corporate Merger Control Public Interest Conditions Exclusivity Clauses Retail Property

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Parties

Growthpoint Properties Limited

Applicant

Liberty Group Limited

Respondent

Procedural Posture

Merger Application / Approval

Legal Issues

  1. 1 Whether the acquisition of Liberty Group's 64.29% interest in Alberton City by Growthpoint Properties raises competition or public interest concerns.
  2. 2 Whether the exclusivity clause in the lease agreement with Shoprite Checkers restricts competition and access for small businesses.
  3. 3 Whether conditions should be imposed to address public interest concerns under section 12A(3)(c) of the Competition Act.

Ratio Decidendi

The Tribunal found that the merger would not substantially lessen competition in the relevant market, as Growthpoint does not own other regional shopping centres in the Alberton node. However, the exclusivity clause in the lease agreement with Shoprite Checkers raised a public interest concern under section 12A(3)(c) of the Competition Act, as it could restrict access for small businesses. The Tribunal approved the merger subject to conditions requiring Growthpoint to negotiate the removal of the exclusivity clause and to report to the Commission on compliance. No significant adverse effects on employment were anticipated.

Court Disposition

Merger approved subject to conditions.

Orders

  • Growthpoint shall negotiate with Shoprite Checkers in utmost good faith to remove the exclusivity clause in the lease agreement within thirty days of the Tribunal order.
  • Growthpoint shall, within sixty days after entering into a new lease agreement with Shoprite Checkers, provide the Commission with a detailed report on compliance with the condition regarding removal of the exclusivity clause.