Vukile Property Fund Limited v Sasol Pension Fund, in respect of the letting enterprise known as Kolonnade Retail Park (LM175Sep18) [2018] ZACT 56 (29 October 2018)
- Citation
- [2018] ZACT 56
- Status
- Judgment
- Jurisdiction
- South Africa
- Court
- Competition Tribunal
- Panel
- Norman Manoim, Andiswa Ndoni, Halton Cheadle
- Case number
- LM175Sep18
More details
- Court
- Competition Tribunal
- Panel
- Norman Manoim, Andiswa Ndoni, Halton Cheadle
- Case number
- LM175Sep18
On this page
Professional case brief
Research organized from the available case record
01
Holding and result
The Tribunal found that there is no geographical overlap between the properties owned by Vukile and the Target Property, as the nearest Vukile property is located 32km away. Competing retail properties are situated within a 20km radius of the Target Property, and Vukile does not own any properties within this competitive catchment area. Therefore, the transaction does not result in a substantial prevention or lessening of competition. Furthermore, the merging parties confirmed that there would be no negative impact on employment or other public interest concerns. The Tribunal concurred with the Competition Commission's findings and approved the transaction unconditionally.
Court disposition
The proposed transaction is approved unconditionally.
Orders
- The proposed acquisition of Kolonnade Retail Park by Vukile Property Fund Limited is approved without conditions.
02
Material facts
Parties
Vukile Property Fund Limited
Applicant Counsel: A AukemaSasol Pension Fund, in respect of the letting enterprise known as Kolonnade Retail Park
Respondent03
Procedural history
Posture
Merger Control / Approval
04
Questions and positions
Legal issues
- 01
Whether the proposed acquisition of Kolonnade Retail Park by Vukile Property Fund Limited will substantially prevent or lessen competition in any relevant market.
- 02
Whether the transaction raises any public interest concerns, including effects on employment.
Party arguments
- Applicant
- Vukile Property Fund Limited argued that the acquisition of Kolonnade Retail Park would not result in any substantial lessening of competition, as there is no geographical overlap between its existing properties and the Target Property. The merging parties asserted that the transaction would not negatively affect employment or raise other public interest concerns.
- Respondent
- Sasol Pension Fund, as the seller, did not oppose the transaction and confirmed that the sale would not result in any adverse competition or public interest effects. The Competition Commission supported this position, noting the absence of competitive overlap and public interest issues.
05
Court’s reasoning
Legal principles
- 01
Competition Act, No. 89 of 1998
A merger may only be prohibited if it is likely to substantially prevent or lessen competition in any relevant market.
- 02
Competition Act, No. 89 of 1998
Public interest considerations, such as employment effects, must be assessed in merger proceedings.
06
Ratio, limits and disposition
Ratio decidendi
The Tribunal found that there is no geographical overlap between the properties owned by Vukile and the Target Property, as the nearest Vukile property is located 32km away. Competing retail properties are situated within a 20km radius of the Target Property, and Vukile does not own any properties within this competitive catchment area. Therefore, the transaction does not result in a substantial prevention or lessening of competition. Furthermore, the merging parties confirmed that there would be no negative impact on employment or other public interest concerns. The Tribunal concurred with the Competition Commission's findings and approved the transaction unconditionally.
Obiter and limits
- The Tribunal noted that comparative centres include minor regional centres, major regional centres, and super regional centres, and that competition is assessed within a 20km radius for retail properties.
- The Tribunal highlighted that the shares in Vukile are widely dispersed, with no single shareholder exercising control.
Court disposition
The proposed transaction is approved unconditionally.
- The proposed acquisition of Kolonnade Retail Park by Vukile Property Fund Limited is approved without conditions.
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: LM175Sep18
In the matter between
Vukile Property Fund Limited
Primary Acquiring Firm
And
Sasol Pension Fund, in respect of the letting
Primary Target Firm
enterprise known as Kolonnade Retail Park
Panel
: Norman Manoim (Presiding Member)
: Andiswa Ndoni (Tribunal Member)
: Halton Cheadle (Tribunal Member)
Heard on : 10 October 2018
Order Issued on : 10 October 2018
Reasons Issued on : 29 October 2018
REASONS
FOR DECISION
Approval
[1] On 10 October 2018, the Competition Tribunal ("Tribunal") unconditionally approved the proposed transaction involving Vukile Property Fund Limited ("Vukile") and Sasol Pension Fund ("Sasol PF"), in respect of the letting enterprise known as Kolonnade Retail Park ("Target Property"), hereinafter collectively referred to as the merging parties.
[2] The reasons for approval of the proposed transaction follow.
Parties to the transaction
Primary Acquiring Firm
[3] Vukile is a real estate investment company listed on the Johannesburg Security Exchange. The shares in Vukile are widely dispersed and as such no single shareholder controls Vukile. Vukile controls are number of firms in South Africa, Namibia and Spain.
[4] Vukile's property portfolio comprises of retail, industrial and office space; as well as land under development. Of relevance, are Vukile's retail properties situated in Johannesburg and Pretoria.
Primary Target Firm
[5] Sasol PF is the sole owner of the Target Property. The Target Property is a minor regional shopping centre located in Montana Park, Pretoria.
Proposed transaction
[6] In terms of the Agreement of Sale of Letting Enterprise, Vukile will acquire the Target Property from Sasol PF. Post-merger, Vukile will own and control the Target Property.
Impact on competition
[7] The Competition Commission ("Commission") considered the activities of the merging parties and found a horizontal overlap in the market for the provision of rentable space in comparative centres.[1]
[8] The Commission found no geographical overlap between the comparative centres owned by the merging parties. The Commission communicated
with property management companies which indicated that retail properties that compete with Target Property are located within a 20km radius. Those properties include Menlyn Park, Montana Crossing, and Hatfield Plaza. Any property located beyond 20km cannot be considered a competitor of the Target Property.
[9] The nearest property owned by Vukile is located 32km away from the Target Property. Given the distance between the merging parties' properties and the fact that merging parties do not compete with one another, the Commission concluded that proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market. We concur with this conclusion.
Public interest
[10] The merging parties confirmed that that the proposed transaction will not have any negative effects on employment in South Africa.
[11] The proposed transaction raises no other public interest concerns.
Conclusion
[12] In light of the above, we conclude that the proposed transaction is unlikely to substantially prevent or lessen competition in any
relevant market. In addition, no public interest concerns arise from the proposed transaction. Accordingly, we approve the proposed
transaction unconditionally.
Mr Norman Manoim
Ms Andiswa Ndoni and Mr Halton Cheadle concurring.
29 October 2018
Date
Tribunal Researcher: Hlumelo Vazi
For the merging parties: A Aukema of Cliffe Dekker Hofmeyr Inc
For the Commission B Mabatamela and T Mahlangu
[1] Comparative centres include minor regional centres. major regional centres and super regional centres.
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.