Investec Property Group Limited and Nestl� (South Africa) (Pty) Ltd (77/LM/Dec03) [2004] ZACT 5 (2 February 2004)

Investec Property Group Limited and Nestl� (South Africa) (Pty) Ltd (77/LM/Dec03) [2004] ZACT 5 (2 February 2004)

The Tribunal found that the transaction, a sale and lease-back arrangement involving industrial warehouse property, would not result in a substantial lessening of competition. Investec Property's market share in the relevant market remains below 1% even after the addition of Nestl�'s property. The market is highly competitive, with tenants able to choose among various premises based on attractive terms, and there are no significant barriers to entry due to the availability of vacant land and the requirement of capital investment. No public interest concerns were identified. Accordingly, the Tribunal approved the merger unconditionally.

Citation
[2004] ZACT 5
Parties
Applicant: Investec Property Group Limited; Respondent: Nestl� (South Africa) (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
2 February 2004
Case Number
77/LM/DEC03
Procedural Posture
Large Merger / Merger Clearance
Outcome
Merger unconditionally approved.
Judges
N Manoim, P Maponya, M Holden
Legal Topics
Merger Clearance, Industrial Property Market, Market Share Analysis, Barriers to Entry
Competition Law Commercial and Corporate Merger Clearance Industrial Property Market Market Share Analysis Barriers to Entry

Case Brief

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Parties

Investec Property Group Limited

Applicant

Nestl� (South Africa) (Pty) Ltd

Respondent

Procedural Posture

Large Merger / Merger Clearance

Legal Issues

  1. 1 Whether the sale and lease-back transaction constitutes a large merger under the Competition Act.
  2. 2 Whether the merger will substantially lessen competition in the market for rentable industrial warehouse property.
  3. 3 Whether there are any significant public interest concerns arising from the transaction.

Ratio Decidendi

The Tribunal found that the transaction, a sale and lease-back arrangement involving industrial warehouse property, would not result in a substantial lessening of competition. Investec Property's market share in the relevant market remains below 1% even after the addition of Nestl�'s property. The market is highly competitive, with tenants able to choose among various premises based on attractive terms, and there are no significant barriers to entry due to the availability of vacant land and the requirement of capital investment. No public interest concerns were identified. Accordingly, the Tribunal approved the merger unconditionally.

Court Disposition

Merger unconditionally approved.

Orders

  • The merger between Investec Property Group Limited and Nestl� (South Africa) (Pty) Ltd is approved without conditions.