Sasol Pension Fund v An undivided half share in property owned by the Elixir Trust (017103) [2013] ZACT 87 (8 August 2013)
- Citation
- [2013] ZACT 87
- Status
- Judgment
- Jurisdiction
- South Africa
- Court
- Competition Tribunal
- Panel
- Andreas Wessels, Andiswa Ndoni, Anton Roskam
- Case number
- 017103
More details
- Court
- Competition Tribunal
- Panel
- Andreas Wessels, Andiswa Ndoni, Anton Roskam
- Case number
- 017103
On this page
Professional case brief
Research organized from the available case record
01
Holding and result
The Tribunal found that there is no overlap in the activities of Sasol Pension Fund and the target property in relation to vacant property or rentable P-grade office property within the Sandton node. Even considering a broader market including both A- and P-grade office property, the merging parties' combined post-merger market share remains relatively small. The property will be leased exclusively to Sasol for a substantial period, meaning it will not be available to third parties, and thus the transaction does not alter the competitive structure of the market. Any overlap in B-grade office property is geographically separated, and even if the geographic market is broadened, the merger has no substantial effect on competition. The Tribunal accepted the Commission's finding that there is no likelihood of post-merger coordination or information sharing between the parties. No negative public interest effects, including employment impacts, were identified. Accordingly, the Tribunal concluded that the proposed transaction is unlikely to substantially prevent or lessen competition and raises no public interest concerns.
Court disposition
The proposed merger is approved unconditionally.
Orders
- The proposed acquisition by Sasol Pension Fund of an undivided half share in property owned by the Elixir Trust is approved unconditionally.
02
Material facts
Parties
Sasol Pension Fund
Applicant Counsel: Cliffe Dekker Hofmeyr Inc.Elixir Trust
Respondent Counsel: Cliffe Dekker Hofmeyr Inc.03
Procedural history
Posture
Merger Approval / Final Determination
04
Questions and positions
Legal issues
- 01
Whether the proposed acquisition of a half share in property by Sasol Pension Fund from the Elixir Trust is likely to substantially prevent or lessen competition in any relevant market.
- 02
Whether the transaction raises any public interest concerns, including employment impacts.
Party arguments
- Applicant
- Sasol Pension Fund argued that the acquisition aligns with its mandate to invest members' savings and pensioners' retirement capital, and that the Sandton node offers exposure to premier office property for investment purposes. The transaction is intended to generate rental income and establish a long-term relationship with Sasol as a blue chip tenant. No negative impact on employment or other public interest concerns would arise.
- Respondent
- Elixir Trust submitted that the transaction provides an opportunity to develop the target property and secure a long-term lease with Sasol Group Services (Pty) Ltd. Elixir contended that the transaction would not result in any substantial effect on competition, as there is no significant overlap in the parties' property holdings within the relevant geographic and product markets. No retrenchments or adverse public interest effects would result.
05
Court’s reasoning
Legal principles
- 01
Competition Act, 1998
A merger may only be prohibited if it is likely to substantially prevent or lessen competition in any relevant market.
- 02
Competition Act, 1998
Public interest considerations, including employment effects, must be assessed in merger proceedings.
06
Ratio, limits and disposition
Ratio decidendi
The Tribunal found that there is no overlap in the activities of Sasol Pension Fund and the target property in relation to vacant property or rentable P-grade office property within the Sandton node. Even considering a broader market including both A- and P-grade office property, the merging parties' combined post-merger market share remains relatively small. The property will be leased exclusively to Sasol for a substantial period, meaning it will not be available to third parties, and thus the transaction does not alter the competitive structure of the market. Any overlap in B-grade office property is geographically separated, and even if the geographic market is broadened, the merger has no substantial effect on competition. The Tribunal accepted the Commission's finding that there is no likelihood of post-merger coordination or information sharing between the parties. No negative public interest effects, including employment impacts, were identified. Accordingly, the Tribunal concluded that the proposed transaction is unlikely to substantially prevent or lessen competition and raises no public interest concerns.
Obiter and limits
- The Tribunal noted that the exclusive lease to Sasol for a lengthy period further reduces any potential competitive impact of the transaction.
- The merging parties' confirmation that no retrenchments would result from the transaction was accepted without reservation.
Court disposition
The proposed merger is approved unconditionally.
- The proposed acquisition by Sasol Pension Fund of an undivided half share in property owned by the Elixir Trust 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
Judgment
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case No.: 017103
In the matter between:
Sasol Pension Fund Primary Acquiring Firm
and
An undivided half share in property owned
by the Elixir Trust Primary Target Firm
Panel
Andreas Wessels (Presiding Member)
Andiswa Ndoni (Tribunal Member)
Anton Roskam (Tribunal Member)
Heard on
31 July 2013
Order issued on
31 July 2013
Reasons issued
08 August 2013
DECISION
Panel
Andreas Wessels (Presiding Member)
Andiswa Ndoni (Tribunal Member)
Anton Roskam (Tribunal Member)
Heard on
31 July 2013
Order issued on
31 July 2013
Reasons issued
08 August 2013
DECISION
Approval
[1] On 31 July 2013, the Competition Tribunal (“Tribunal”) unconditionally approved the proposed acquisition by Sasol Pension Fund of an undivided half share in property owned by the Elixir Trust.
[2] The reasons for approving the proposed transaction follow.
Parties to transaction
[3] The primary acquiring firm is Sasol Pension Fund (“SPF”). SPF is a registered pension fund in terms of the Pension Funds Act, 1956. It holds interests in various firms as passive investments. It does not control any firm.
[4] The members of SPF comprise of staff of Sasol Limited ("Sasol”) and its associates. SPF invests its contributing members’ savings and pensioners’ retirement capital to generate returns for its contributing members and income to pay benefits to retired members. It also invests in and develops property to generate rental income. SPF leases property to third parties, as well as to Sasol.
[5] The primary target firm is the Elixir Trust ("Elixir”) in respect of one undivided half share in vacant immovable land situated in Sandton and zoned for office property development (“the target property”).1
[6] In terms of the proposed transaction the target property consists of land2 in the Sandton node that will be developed into 67 000 m2 of P-Grade office space3 in order to lease the property to Sasol Group Services (Pty) Ltd as its new corporate offices.4
[7] Elixir invests in and develops property to benefit its beneficiaries. Of relevance to the competition assessment of this transaction is that Elixir owns inter alia two B-grade office properties in the Sandton node.
Proposed transaction and rationale
[8] In terms of the proposed transaction SPF intends to acquire 50% undivided shares in the target property from Elixir. Following the implementation of the proposed transaction, the target property will be jointly controlled by SPF and Elixir.
[9] In addition to the sale of properties agreement, SPF and Elixir have concluded a co-ownership agreement, a development agreement and a property management agreement.5
[10] The proposed transaction is in line with SPF’s mandate to invest the savings of its contributing members and pensioners’
retirement capital and the Sandton node offers exposure to premier office property for investment purposes.6
[11] According to Elixir this transaction provides the opportunity to develop the target property and to create a long-term relationship
with a blue chip tenant such as Sasol.
Competition assessment
[12] In relation to vacant property or rentable P-grade office property (see paragraph 6 above), the Commission found no overlap in the activities of SPF and the target property, since SPF does not own any vacant property or any rentable P-grade office property within the Sandton node.
[13] In relation to a potential product market including both A- and P-grade office property, the Commission found that SPF’s
A-grade property is located in the Rose bank node whilst the target property is located in the Sandton node. However, even if the
Rosebank and Sandton nodes are considered as one geographic market, the merging parties’ combined postmerger market share remains relatively small.
[14] In addition, given the fact that the target property will be leased out to Sasol for a period of [...] years, the transaction does not significantly alter the structure of the market since the property will not be available for lease to third parties during that period.
[15] The Commission further identified a product overlap in the activities of SPF and Elixir in the market for rentable B-grade office space. However, SPF’s B-grade office properties are located within the Centurion and Rosebank nodes, whereas the B-grade office properties owned by Elixir are located in the Sandton node. However, even if the Rosebank and Sandton nodes are considered as one geographic market, the proposed merger has no substantial effect on competition in the market.
[16] Furthermore, the Commission found no likelihood of the proposed merger creating a platform for SPF and Elixir to post-merger share sensitive information and facilitate coordination. We have no reason to doubt this finding.
[17] Therefore we conclude that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market.
Public interest
[18] The merging parties confirmed that the proposed transaction will not have any negative impact on employment and that no retrenchments will result from the proposed transaction.7 No other public interest issues arise as a result of this transaction.
CONCLUSION
[19] Having regard to the facts above, we find that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market. Furthermore, no public interest concerns arise as a result of the proposed transaction. Accordingly, we approve the proposed merger unconditionally.
ANDREAS
WESSELS
08 August 2013
DATE
Andiswa Ndoni and Anton Roskam concurring
Tribunal Researcher: Nicola llgner
For the Commission: Dineo Mashego and Themba Mahlangu
For the merging parties: Cliffe Dekker Hofmeyr Inc.'
1 For a full description of this property, see inter alia pages 7 and 8 of the merger record. Also see page 9 of the Commission’s Report.
2 The target property previously held office properties, but these properties have been demolished. It now comprises various portions
of vacant land zoned for office property development.
3 SAPOA defines Grade P property as top-quality, generally modern space which is a pacesetter in establishing rentals and which includes the latest or a recent generation of building services, ample parking, a prestige lobby and good views, or a good environment.
4 See inter alia pages 35 and 39 of the merger record.
5 See pages 36 and 37 of the merger record.
6 See page 36 of the merger record.
7See pages 9 and 43 of the merger record, as well as page 5 of the transcript.
Case-aware research
Ask AI about this case
The judgment and available research above are public. New questions open in a separate private conversation grounded in this case.