Hemipac Investments Proprietary Limited v Ascension Properties Proprietary Limited (LM112Oct23) [2024] ZACT 41 (6 March 2024)

Hemipac Investments Proprietary Limited v Ascension Properties Proprietary Limited (LM112Oct23) [2024] ZACT 41 (6 March 2024)

The Tribunal found that the proposed transaction would not result in a substantial prevention or lessening of competition in any relevant market. The merging parties' market shares in the affected geographic and product markets are low, and there are sufficient competitive constraints from other A- and B-grade office properties. The public interest assessment revealed no employment concerns, as all employees will be transferred under section 197 of the Labour Relations Act. Although the transaction results in some dilution of HDP shareholding, Hemipac Investments committed to annual procurement from HDP suppliers for three years, and the majority HDP ownership will be retained. The...

Citation
[2024] ZACT 41
Parties
Applicant: Hemipac Investments Proprietary Limited; Respondent: Ascension Properties Proprietary Limited; Respondent: Competition Commission of South Africa
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
6 March 2024
Case Number
LM112Oct23
Procedural Posture
Large Merger Review / Reasons for Decision
Outcome
Merger conditionally approved subject to procurement conditions.
Judges
A Kessery, A Ndoni, F Tregenna
Legal Topics
Large Merger Review, Public Interest Conditions, Hdp Procurement, Office Space Market Definition, Section 197 Transfer, Market Share Analysis
Competition Law Commercial and Corporate Land and Property Large Merger Review Public Interest Conditions Hdp Procurement Office Space Market Definition Section 197 Transfer +1 more

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Parties

Hemipac Investments Proprietary Limited

Applicant

Ascension Properties Proprietary Limited

Respondent

Competition Commission of South Africa

Respondent

Procedural Posture

Large Merger Review / Reasons for Decision

Legal Issues

  1. 1 Whether the proposed acquisition of ten property rental enterprises by Hemipac Investments will substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the transaction raises any public interest concerns, including employment and the spread of ownership among historically disadvantaged persons.
  3. 3 Whether the conditions imposed adequately address any dilution of HDP shareholding resulting from the merger.

Ratio Decidendi

The Tribunal found that the proposed transaction would not result in a substantial prevention or lessening of competition in any relevant market. The merging parties' market shares in the affected geographic and product markets are low, and there are sufficient competitive constraints from other A- and B-grade office properties. The public interest assessment revealed no employment concerns, as all employees will be transferred under section 197 of the Labour Relations Act. Although the transaction results in some dilution of HDP shareholding, Hemipac Investments committed to annual procurement from HDP suppliers for three years, and the majority HDP ownership will be retained. The...

Court Disposition

Merger conditionally approved subject to procurement conditions.

Orders

  • The proposed transaction is approved subject to the conditions set out in Annexure A.
  • Hemipac Investments must spend R1,000,000 per year for three years on procurement from HDP suppliers for cleaning, security, maintenance, and construction.