Ivlyn No 2 (Pty) Ltd (2016/360925/07) v The retail letting enterprise conducted in respect of the Valley View Retail Centre (LM246Nov17) [2018] ZACT 6 (10 January 2018)
- Citation
- [2018] ZACT 6
- Status
- Order
- Jurisdiction
- South Africa
- Court
- Competition Tribunal
- Panel
- N Manoim, AW Wessels, M Mokuena
- Case number
- LM246Nov17
More details
- Court
- Competition Tribunal
- Panel
- N Manoim, AW Wessels, M Mokuena
- Case number
- LM246Nov17
On this page
Professional case brief
Research organized from the available case record
01
Holding and result
The Tribunal found that the proposed merger between Ivlyn No 2 (Pty) Ltd and the retail letting enterprise conducted in respect of the Valley View Retail Centre would not substantially prevent or lessen competition in any relevant market. The merging parties do not compete in the same geographic market, and there are sufficient alternative retail centres nearby to constrain the merged entity post-merger. The Tribunal also found that the acquiring group's interest in Dis-Chem would not preclude other pharmacy retailers from entering the Target property. Furthermore, the merger would not have any adverse effects on employment or other public interest concerns, as neither party has employees and no other public interest issues were identified. Accordingly, the Tribunal approved the merger unconditionally.
Court disposition
Merger approved unconditionally.
Orders
- The large merger between Ivlyn No 2 (Pty) Ltd and the retail letting enterprise conducted in respect of the Valley View Retail Centre is approved unconditionally.
02
Material facts
Parties
Ivlyn No 2 (Pty) Ltd
Applicant Counsel: M RheederThe retail letting enterprise conducted in respect of the Valley View Retail Centre
Respondent03
Procedural history
Posture
Merger Approval / Final Determination
04
Questions and positions
Legal issues
- 01
Whether the proposed merger would substantially prevent or lessen competition in any relevant market.
- 02
Whether the merger would have any adverse effects on public interest, including employment.
- 03
Whether the acquiring firm's interest in Dis-Chem would constrain other pharmacy businesses from entering the Target property.
Party arguments
- Applicant
- The applicant argued that the merger would not result in any substantial lessening of competition, as the acquiring group and the target property do not compete in the same geographic market. The applicant further submitted that the transaction would not affect employment, as neither party has employees, and that the acquiring group's interest in Dis-Chem would not preclude other pharmacy retailers from entering the Target property.
- Respondent
- The respondent, represented by the Competition Commission, agreed that the merger would not negatively affect competition or public interest. The Commission confirmed that the merging parties do not compete in the same geographic market and that there are sufficient alternative retail centres nearby to constrain the merged entity. The Commission also concurred that no adverse employment effects or other public interest concerns would arise.
05
Court’s reasoning
Legal principles
- 01
Competition Act, No. 89 of 1998
A merger may only be prohibited if it is likely to substantially prevent or lessen competition in any relevant market.
- 02
Competition Act, No. 89 of 1998
Public interest considerations, including employment, must be assessed in merger proceedings.
06
Ratio, limits and disposition
Ratio decidendi
The Tribunal found that the proposed merger between Ivlyn No 2 (Pty) Ltd and the retail letting enterprise conducted in respect of the Valley View Retail Centre would not substantially prevent or lessen competition in any relevant market. The merging parties do not compete in the same geographic market, and there are sufficient alternative retail centres nearby to constrain the merged entity post-merger. The Tribunal also found that the acquiring group's interest in Dis-Chem would not preclude other pharmacy retailers from entering the Target property. Furthermore, the merger would not have any adverse effects on employment or other public interest concerns, as neither party has employees and no other public interest issues were identified. Accordingly, the Tribunal approved the merger unconditionally.
Obiter and limits
- The Tribunal noted that even though Dis-Chem is the only pharmaceutical retailer in the Target property, there is no evidence that the acquiring group would prevent other pharmacy businesses from entering the premises.
- The Tribunal agreed with the Commission that the transaction does not raise any adverse public interest concerns, including employment.
Court disposition
Merger approved unconditionally.
- The large merger between Ivlyn No 2 (Pty) Ltd and the retail letting enterprise conducted in respect of the Valley View Retail Centre is approved unconditionally.
Source and reliance status
Competition Tribunal
This page organises the available record for research. Confirm quotations, current status, and subsequent treatment against the official source before relying on the case.
Judgment reading view
Judgment text
The complete available source text.
Competition Tribunal
Order
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case No: LM246Nov17
In the matter between
lvlyn No 2 (Pty) Ltd (2016/360925/07)
Primary Acquiring Firm
And
The retail letting enterprise conducted in
Primary Target Firm
respect of the Valley View Retail Centre
Panel
: Mr N Manoim (Presiding Member)
: Mr AW Wessels (Tribunal Member)
: Mrs M Mokuena (Tribunal Member)
Heard on
: 10 January 2018
Order Issued on : 10 January 2018
Reasons Issued on : 26 January 2018
REASONS
FOR DECISION
Approval
[1] On 10 January 2018, the Competition Tribunal ("Tribunal") unconditionally approved the large merger between lvlyn No 2 (Pty) Ltd ("lvlyn No 2") and the retail letting enterprise conducted in respect of the Valley View Retail Centre ("Target
property"), hereinafter collectively referred to as the merging parties.
[2] The reasons for the approval follow.
Primary Acquiring Firm
[3] lvlyn No 2 is a company incorporated specifically for the proposed transaction and currently does not conduct any business. lvlyn No 2 is ultimately controlled by the trustees of the Saltzman Family Trust. lvlyn No 2 and its controllers are hereafter referred to as the 'Acquiring group'.
[4] The Acquiring group is an investment holding entity that is indirectly active in the provision of products and services through its many subsidiaries, primarily Dis Chem Pharmacies Limited (uDis-Chem"). Furthermore, the Acquiring Group also directly and indirectly controls various property-owning companies that own residential, retail, warehouse and office property located in
Gauteng, Eastern Cape, Western Cape, Mpumalanga and KwaZulu-Natal.
[5] Of relevance to the proposed transaction is the Acquiring group's five properties located in Gauteng.
Primary Target Firm
[6] The Target property is a retail letting business that is classified as a retail convenience centre located in Noordheuwel, Krugersdorp in Gauteng. Marssen 8 (Pty) Ltd ("Marssen") holds a 50% undivided share interest in the Target property and the other 50% is held by Benflat Properties (Pty) Ltd ( “Benflat".)
Proposed transaction and rationale
[7] lvlyn No 2 intends to acquire the undivided 50% issued share capital in the Target property from Marssen. Post-merger, lvlyn No 2 and Benflat will exercise joint control over the Target property.
[8] Both parties engage in the business of providing rentable retail space. However they do not compete in the same geographic market as the Target property is located 21kms from the nearest of the Acquiring group's retail properties. There are various convenience centres such as Key West Shopping Centre, Cradlestone Mall and Anthos Centre, located near the Target property that will continue to constrain the merging parties post-merger.
[9] We enquired whether the merger might constrain any other pharmacy business from letting premises in the Target property in the future,
given the acquiring firm's interest in Dis-Chem. The merging parties clarified that even though Dis-Chem was the only pharmaceutical
products retailer in the Target property, neither Dis-Chem nor the Acquiring group would preclude the entry of any other retail pharmacy in the Target property.
[10] The proposed transaction thus does not alter the pre-merger status quo.
Public interest
[11] The merging parties submitted that proposed transaction is unlikely to have any adverse effects on employment as the merging parties do not have any employees. From the above, the Commission was of the view that the proposed transaction is unlikely to negatively affect employment and does not raise any other public interest concerns. We agreed.
[12] In light of the above, we concluded that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market. In addition, no adverse public interest issues arise from the proposed transaction. Accordingly, we approved the proposed transaction unconditionally.
Mr Norman Manoim
26 January 2018 Date
Mr Andreas Wessels and Mrs Medi Mokuena concurring.
Tribunal Case Manager : Ndumiso Ndlovu.
For the Merging Parties : M Rheeder of Saltzman Attorneys.
For the Commission : N Msiza and Z Hadebe.
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