Growthpoint Properties Limited and 100 Grayston Drive Property (Pty) Ltd / Block E Power Station Properties (Pty) Ltd (80/LM/DEC03) [2004] ZACT 10 (6 February 2004)

Growthpoint Properties Limited and 100 Grayston Drive Property (Pty) Ltd / Block E Power Station Properties (Pty) Ltd (80/LM/DEC03) [2004] ZACT 10 (6 February 2004)

The Tribunal found that the merger would not result in a substantial lessening of competition in the relevant market for Grade P office space in the Sandton node. Growthpoint's market share would only increase marginally, and the presence of multiple new entrants demonstrated low barriers to entry. The lease arrangement with Investec Bank Limited would continue, and no employment losses would occur as neither Growthpoint nor the target firms have employees; property administration is performed by Investec Bank Limited. There were no public interest concerns identified. The Tribunal agreed with the Commission's recommendation and approved the merger unconditionally.

Citation
[2004] ZACT 10
Parties
Applicant: Growthpoint Properties Limited; Respondent: 100 Grayston Drive Property (Pty) Ltd; Respondent: Block E Power Station Properties (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
6 February 2004
Case Number
80/LM/DEC03
Procedural Posture
Large Merger / Merger Clearance Decision
Outcome
Merger unconditionally approved.
Judges
D Lewis, N Manoim, U Bhoola
Legal Topics
Large Merger Review, Market Definition, Barriers to Entry, Public Interest, Grade P Office Space
Competition Law Commercial and Corporate Large Merger Review Market Definition Barriers to Entry Public Interest Grade P Office Space

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Parties

Growthpoint Properties Limited

Applicant

100 Grayston Drive Property (Pty) Ltd

Respondent

Block E Power Station Properties (Pty) Ltd

Respondent

Procedural Posture

Large Merger / Merger Clearance Decision

Legal Issues

  1. 1 Whether the proposed merger will substantially lessen competition in the relevant market.
  2. 2 Whether there are any public interest concerns arising from the transaction.
  3. 3 Whether the transaction will result in employment losses.

Ratio Decidendi

The Tribunal found that the merger would not result in a substantial lessening of competition in the relevant market for Grade P office space in the Sandton node. Growthpoint's market share would only increase marginally, and the presence of multiple new entrants demonstrated low barriers to entry. The lease arrangement with Investec Bank Limited would continue, and no employment losses would occur as neither Growthpoint nor the target firms have employees; property administration is performed by Investec Bank Limited. There were no public interest concerns identified. The Tribunal agreed with the Commission's recommendation and approved the merger unconditionally.

Court Disposition

Merger unconditionally approved.

Orders

  • The merger between Growthpoint Properties Limited and 100 Grayston Drive Property (Pty) Ltd and Block E Power Station Properties (Pty) Ltd is unconditionally approved.
  • A Merger Clearance Certificate is issued.