Municipal Employee Pension Fund v The letting enterprises known as Glen Village Shopping Centre North, Glen Village Shopping Centre South and Parkview Centre and Others (102/LM/Nov11) [2012] ZACT 5 (18 January 2012)
The Tribunal found that there is no geographic overlap between the activities of the merging parties, as the acquiring firm does not own any commercial property in the Pretoria region. Therefore, the proposed transaction is unlikely to substantially prevent or lessen competition. The merging parties confirmed that...
Source-derived case information.
- Citation
- [2012] ZACT 5
- Parties
- Applicant: Municipal Employee Pension Fund; Respondent: Takou Investments (Pty) Ltd; Respondent: Chrisal Investments (Pty) Ltd; Respondent: ProcProps 60 (Pty) Ltd; Respondent: Adamax Property Projects Menlyn (Pty) Ltd
- Court
- Competition Tribunal
- Jurisdiction
- South Africa
- Case Number
- 102/LM/Nov11
- Procedural Posture
- Merger Control / Merger Approval
- Outcome
- Merger approved unconditionally.
- Judges
- Andreas Wessels, Medi Mokuena, Andiswa Ndoni
- Legal Topics
- Merger Control, Substantial Lessening of Competition, Public Interest, Joint Control, Commercial Property Investment
Source-derived case record
Summary, issues, holding and outcome
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Parties
Municipal Employee Pension Fund
Applicant
Takou Investments (Pty) Ltd
Respondent
Chrisal Investments (Pty) Ltd
Respondent
ProcProps 60 (Pty) Ltd
Respondent
Adamax Property Projects Menlyn (Pty) Ltd
Respondent
Procedural Posture
Merger Control / Merger Approval
Legal Issues
- 1 Whether the proposed merger is likely to substantially prevent or lessen competition in any relevant market.
- 2 Whether the proposed merger raises any public interest concerns.
Ratio Decidendi
The Tribunal found that there is no geographic overlap between the activities of the merging parties, as the acquiring firm does not own any commercial property in the Pretoria region. Therefore, the proposed transaction is unlikely to substantially prevent or lessen competition. The merging parties confirmed that there would be no adverse effect on employment, and no other public interest issues were identified. Consequently, the Tribunal approved the merger unconditionally.
Court Disposition
Merger approved unconditionally.
Orders
- The proposed merger between Municipal Employee Pension Fund and the letting enterprises known as Glen Village Shopping Centre North, Glen Village Shopping Centre South and Parkview Centre is approved unconditionally.
Full Case Text
Judgment text and source record
46 paragraphs
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 102/LM/Nov11
In the matter between:
MUNICIPAL EMPLOYEE PENSION FUND …...........................................Acquiring Firm
And
THE LETTING ENTERPRISES KNOWN AS
GLEN VILLAGE SHOPPING CENTRE NORTH,
GLEN VILLAGE SHOPPING CENTRE SOUTH AND
PARKVIEW CENTRE
BEING SOLD BY
TAKOU INVESTMENTS (PTY) LTD,
CHRISAL INVESTMENTS (PTY) LTD AND
PROCPROPS 60 (PTY) LTD …......................................................................Target Firms
Panel : Andreas Wessels (Presiding Member)
Medi Mokuena (Tribunal Member) and
Andiswa Ndoni (Tribunal Member)
Heard on : 18 January 2012
Order issued on : 18 January 2012
Reasons issued on : 18 January 2012
Reasons for Decision
Approval
On 18 January 2012 the Competition Tribunal (“Tribunal”) approved the merger between the Municipal Employee Pension Fund and the letting enterprises known as Glen Village Shopping Centre North, Glen Village Shopping Centre South and Parkview Centre. The reasons for approving the proposed transaction follow below.
Parties to the transaction
The primary acquiring firm is the Municipal Employee Pension Fund (“MEPF”), a pension fund established in terms of the laws of the Republic of South Africa, which was set up for the benefit of previously disadvantaged employees within local government. It is administered by AKANI Retirement Fund Administrators (Pty) Ltd (“AKANI”).
The primary target firms in effect consist of three letting enterprises situated in Pretoria East, inclusive of associated residential
property and the associated leases, being the Glen Village North Shopping Centre, the Glen Village South Shopping Centre (collectively referred to as “Glen Village”1) and Parkview Centre (“Parkview”). These properties are held by Takou Investments (Pty) Ltd (“Takou”), Chrisal Investments (Pty) Ltd (“Chrisal”) and ProcProps 60 (Pty) Ltd (“ProcProps”), collectively referred to below as “the sellers”. The sellers form part of Adamax Property Projects Menlyn (Pty) Ltd (“Adamax”).
Proposed transaction
The proposed transaction involves the MEPF’s acquisition of 55% of the issued share capital held by Takou, Chrisal and ProcProps in the respective target properties. However, MEPF and Adamax have concluded a co-ownership agreement which reflects their joint-control of the letting enterprises post-merger.
Rationale for transaction
The rationale for the proposed merger is that the acquiring firm wants to realise returns on its investment in a growing and expanding property node such as the Pretoria East one.
The sellers’ rationale is that they want to fully develop the potential of the existing rights associated with the properties being sold, as well as attract substantial investment by the acquiring firm.
Impact on competition
There is no geographic overlap between the activities of the merging parties since the MEPF, as the acquiring firm, does not own any commercial property of any grade or any classification within the Pretoria and environs region. Therefore the proposed transaction is unlikely to substantially prevent or lessen competition.
Public interest
The merging parties confirmed that there will be no adverse effect on employment as a result of the proposed transaction.2 No other public interest issues arise as a result of this transaction.
CONCLUSION
We conclude that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market. Furthermore, the proposed transaction raises no public interest concerns. Accordingly, we approve the proposed merger unconditionally.
____________________ 18 January 2012
ANDREAS WESSELS DATE
Andiswa Ndoni and Medi Mokuena concurring
Tribunal researcher: Nicola Ilgner
For the merging parties: Norton Rose
For the Commission: Dineo Mashego
1These two centres are separated into North and South by a public road.
2See page 13 of the record.
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