Vukile Property Fund Limited v Thavhani Property Investments (Proprietary) Limited in repsect of 1/3 undivided interest in the Thavhani Mall Letting Enterprise (LM135Sep15) [2015] ZACT 70 (3 December 2015)

Vukile Property Fund Limited v Thavhani Property Investments (Proprietary) Limited in repsect of 1/3 undivided interest in the Thavhani Mall Letting Enterprise (LM135Sep15) [2015] ZACT 70 (3 December 2015)

The Tribunal found that the acquisition by Vukile Property Fund Limited of a 1/3 undivided interest in the Thavhani Mall Letting Enterprise does not result in any substantial prevention or lessening of competition in the relevant retail property market, as there is no geographic overlap between the activities of the merging parties. The transaction raises no public interest concerns, including employment effects. However, the Tribunal imposed conditions requiring Vukile to notify the Competition Commission should it exercise step-in rights to acquire the remaining undivided share in the Thavhani Mall, as such an event would constitute a change in control and trigger merger notification...

Citation
[2015] ZACT 70
Parties
Applicant: Vukile Property Fund Limited; Respondent: Thavhani Property Investments (Proprietary) Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
3 December 2015
Case Number
LM135Sep15
Procedural Posture
Merger Approval / Final Determination
Outcome
The merger is conditionally approved subject to compliance with notification requirements regarding future exercise of step-in rights.
Judges
Andreas Wessels, lmraan Valodia, Medi Mokuena
Legal Topics
Merger Notification, Change of Control, Step in Rights, Public Interest, Retail Property Market
Competition Law Commercial and Corporate Merger Notification Change of Control Step in Rights Public Interest Retail Property Market

Case Brief

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Parties

Vukile Property Fund Limited

Applicant

Thavhani Property Investments (Proprietary) Limited

Respondent

Procedural Posture

Merger Approval / Final Determination

Legal Issues

  1. 1 Whether the acquisition by Vukile Property Fund Limited of a 1/3 undivided interest in the Thavhani Mall Letting Enterprise is likely to substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the exercise of step-in rights by Vukile in future would trigger merger notification obligations under the Competition Act.
  3. 3 Whether the transaction raises any public interest concerns, including adverse effects on employment.

Ratio Decidendi

The Tribunal found that the acquisition by Vukile Property Fund Limited of a 1/3 undivided interest in the Thavhani Mall Letting Enterprise does not result in any substantial prevention or lessening of competition in the relevant retail property market, as there is no geographic overlap between the activities of the merging parties. The transaction raises no public interest concerns, including employment effects. However, the Tribunal imposed conditions requiring Vukile to notify the Competition Commission should it exercise step-in rights to acquire the remaining undivided share in the Thavhani Mall, as such an event would constitute a change in control and trigger merger notification...

Court Disposition

The merger is conditionally approved subject to compliance with notification requirements regarding future exercise of step-in rights.

Orders

  • Should Vukile elect to exercise the step-in rights within 18 months from the date of approval, it shall inform the Competition Commission within 20 business days by submitting an affidavit to mergerconditions@compcom.co.za.
  • Should Vukile elect to exercise the step-in rights after 18 months from the date of approval, it shall notify the exercise as a merger in terms of section 13A of the Competition Act.