SKG Towers Proprietary Limited v Immovable Property and Rental Enterprise Know as Portion 1 of Erf 2909 Pretoria Township (LM126Oct19) [2020] ZACT 6 (5 February 2020)

SKG Towers Proprietary Limited v Immovable Property and Rental Enterprise Know as Portion 1 of Erf 2909 Pretoria Township (LM126Oct19) [2020] ZACT 6 (5 February 2020)

The Tribunal found that the proposed transaction resulted in a horizontal overlap in the market for rentable office space in Pretoria CBD, but the merged entity would have a low market share of less than 25% and a minimal accretion of approximately 4%. The parties would continue to face competition from other property owners. No adverse public interest effects, including employment concerns, were identified, as neither the acquiring firm nor the Target Property had employees. The Tribunal concluded that the merger was unlikely to substantially prevent or lessen competition and did not raise any public interest concerns. Accordingly, the merger was unconditionally approved.

Citation
[2020] ZACT 6
Parties
Applicant: SKG Towers Proprietary Limited; Respondent: Immovable Property and Rental Enterprise Known as Portion 1 of Erf 2909 Pretoria Township
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
5 February 2020
Case Number
LM126Oct19
Procedural Posture
Merger Control / Approval
Outcome
Unconditional approval of the merger.
Judges
Y Carrim, A Ndoni, H Cheadle
Legal Topics
Merger Control, Horizontal Overlap, Market Share Analysis, Public Interest, Employment Effects
Competition Law Commercial and Corporate Merger Control Horizontal Overlap Market Share Analysis Public Interest Employment Effects

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Parties

SKG Towers Proprietary Limited

Applicant

Immovable Property and Rental Enterprise Known as Portion 1 of Erf 2909 Pretoria Township

Respondent

Procedural Posture

Merger Control / Approval

Legal Issues

  1. 1 Whether the proposed merger would substantially prevent or lessen competition in the market for rentable office space in Pretoria CBD.
  2. 2 Whether the transaction raises any public interest concerns, including employment effects.

Ratio Decidendi

The Tribunal found that the proposed transaction resulted in a horizontal overlap in the market for rentable office space in Pretoria CBD, but the merged entity would have a low market share of less than 25% and a minimal accretion of approximately 4%. The parties would continue to face competition from other property owners. No adverse public interest effects, including employment concerns, were identified, as neither the acquiring firm nor the Target Property had employees. The Tribunal concluded that the merger was unlikely to substantially prevent or lessen competition and did not raise any public interest concerns. Accordingly, the merger was unconditionally approved.

Court Disposition

Unconditional approval of the merger.

Orders

  • The proposed transaction between SKG Towers Proprietary Limited and Portion 1 of Erf 2909, Pretoria Township is unconditionally approved.