Arrowhead Properties Limited v Vividend Income Fund Limited (018929) [2014] ZACT 12 (24 July 2014)

Arrowhead Properties Limited v Vividend Income Fund Limited (018929) [2014] ZACT 12 (24 July 2014)

The Tribunal found that the proposed transaction would not substantially prevent or lessen competition in the relevant markets for rental space in B-Grade office properties in the Randburg and Durban CBD nodes, nor in convenience centres within a 10km radius of Vividend retail properties. The merging parties' post-merger market shares remain low, and there is no significant geographic overlap in retail properties. However, the transaction raises public interest concerns regarding employment, as Arrowhead's business model involves outsourcing and could result in retrenchment of 21 Vividend employees. After deliberation, the merging parties agreed to employ the affected employees on a...

Citation
[2014] ZACT 12
Parties
Applicant: Arrowhead Properties Limited; Respondent: Vividend Income Fund Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
24 July 2014
Case Number
018929
Procedural Posture
Merger Control / Tribunal Approval With Conditions
Outcome
Merger conditionally approved subject to employment protection.
Judges
T Madima, F Tregenna, A Ndoni
Legal Topics
Merger Control, Public Interest, Employment Retrenchment, Horizontal Overlap
Competition Law Commercial and Corporate Merger Control Public Interest Employment Retrenchment Horizontal Overlap

Case Brief

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Parties

Arrowhead Properties Limited

Applicant

Vividend Income Fund Limited

Respondent

Procedural Posture

Merger Control / Tribunal Approval With Conditions

Legal Issues

  1. 1 Whether the proposed acquisition by Arrowhead of 100% of Vividend's linked units would substantially prevent or lessen competition in relevant property rental markets.
  2. 2 Whether the transaction raises significant public interest concerns, particularly regarding employment retrenchments.
  3. 3 Whether the merger should be approved subject to conditions to address employment concerns.

Ratio Decidendi

The Tribunal found that the proposed transaction would not substantially prevent or lessen competition in the relevant markets for rental space in B-Grade office properties in the Randburg and Durban CBD nodes, nor in convenience centres within a 10km radius of Vividend retail properties. The merging parties' post-merger market shares remain low, and there is no significant geographic overlap in retail properties. However, the transaction raises public interest concerns regarding employment, as Arrowhead's business model involves outsourcing and could result in retrenchment of 21 Vividend employees. After deliberation, the merging parties agreed to employ the affected employees on a...

Court Disposition

Merger conditionally approved subject to employment protection.

Orders

  • The proposed transaction is approved subject to the condition that the merged entity shall not retrench the 21 employees for a period of three years from the effective date as a result of the proposed transaction.