SA Corporate Real Estate Fund and SA Retail Properties Ltd (19/LM/Feb07) [2007] ZACT 36 (14 May 2007)

SA Corporate Real Estate Fund and SA Retail Properties Ltd (19/LM/Feb07) [2007] ZACT 36 (14 May 2007)

The Tribunal found that, except for Stellenbosch, the merger would not substantially prevent or lessen competition in the relevant retail property markets. In Stellenbosch, the merged entity's market share would have been high, but the parties' agreement to sell the Eikestad Mall to a third party would reduce the merged entity's market share to a non-problematic level. The Tribunal made the divestiture of the Eikestad Mall a condition for approval, ensuring that competition concerns were adequately addressed. No significant public interest issues were identified. Accordingly, the merger was approved subject to the divestiture condition.

Citation
[2007] ZACT 36
Parties
Applicant: SA Corporate Real Estate Fund; Respondent: SA Retail Properties Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
14 May 2007
Case Number
19/LM/Feb07
Procedural Posture
Merger Control / Tribunal Approval With Conditions
Outcome
Merger conditionally approved subject to divestiture of the Eikestad Mall property.
Judges
Y Carrim, N Manoim, M Madlanga
Legal Topics
Merger Control, Divestiture Conditions, Market Share Analysis, Public Interest
Competition Law Commercial and Corporate Merger Control Divestiture Conditions Market Share Analysis Public Interest

Case Brief

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Parties

SA Corporate Real Estate Fund

Applicant

SA Retail Properties Ltd

Respondent

Procedural Posture

Merger Control / Tribunal Approval With Conditions

Legal Issues

  1. 1 Whether the proposed merger between SA Corporate Real Estate Fund and SA Retail Properties Ltd would substantially prevent or lessen competition in the relevant retail property markets.
  2. 2 Whether the transaction raises any significant public interest concerns.
  3. 3 Whether the divestiture of the Eikestad Mall property is a sufficient condition to address potential competition concerns in Stellenbosch.

Ratio Decidendi

The Tribunal found that, except for Stellenbosch, the merger would not substantially prevent or lessen competition in the relevant retail property markets. In Stellenbosch, the merged entity's market share would have been high, but the parties' agreement to sell the Eikestad Mall to a third party would reduce the merged entity's market share to a non-problematic level. The Tribunal made the divestiture of the Eikestad Mall a condition for approval, ensuring that competition concerns were adequately addressed. No significant public interest issues were identified. Accordingly, the merger was approved subject to the divestiture condition.

Court Disposition

Merger conditionally approved subject to divestiture of the Eikestad Mall property.

Orders

  • The merger between SA Corporate Real Estate Fund and SA Retail Properties Ltd is approved subject to the condition that the merging parties divest all right, title and interest in the business comprising the letting enterprise and property known as Erven 4282, 7365 and 6083 Stellenbosch (Eikestad Mall).