Automated Summary
Key Facts
The Competition Tribunal approved Mendo Property Proprietary Limited's acquisition of five Target Properties from Vukile Property Fund Limited on 10 August 2016. The transaction involves office and retail properties in Pretoria and Bloemfontein. The Commission found horizontal overlap in three markets: Grade B/C office in Pretoria CBD/surrounding node, Grade B/C office in Bloemfontein node, and retail space in convenience centres within a 5km radius. Post-merger market share for the merged entity ranges between 9-18% across these markets, with no substantial prevention or lessening of competition. The Tribunal concurred with the Commission's conclusion, approving the transaction unconditionally with no public interest concerns.
Issues
- The Competition Tribunal considered whether the proposed acquisition of 5 Target Properties by Mendo Properties from Vukile Property Fund would substantially prevent or lessen competition in the relevant markets for rentable office and retail property in Pretoria and Bloemfontein. The merged entity's combined market share was found to be between 9-18% in the relevant markets, but the Tribunal concluded it would remain constrained by other market players.
- The Tribunal assessed public interest considerations and found the proposed transaction would have no negative employment effects and raised no other public interest concerns.
Holdings
The Competition Tribunal concluded that the proposed transaction between Mendo Properties Proprietary Limited and Vukile Property Fund Limited in respect of 5 Target Properties is unlikely to substantially prevent or lessen competition in any relevant market. The merged entity's combined post-merger market share in the identified markets (Grade B and C office property in Pretoria CBD and surrounding node, Grade B and C office in Bloemfontein node, and retail space in convenience centres within a 5km radius) ranges between 9-18%, and it will remain constrained by other market players. Additionally, no public interest concerns were raised, and the transaction will not negatively affect employment. Accordingly, the Tribunal approved the transaction unconditionally.
Remedies
The Competition Tribunal approved the proposed transaction between Mendo Properties Proprietary Limited and Vukile Property Fund Limited in respect of 5 Target Properties unconditionally on 10 August 2016.
Legal Principles
The Competition Tribunal approved the transaction between Mendo Properties and Vukile Property Fund for 5 Target Properties, concluding it would not substantially prevent or lessen competition in relevant markets. The Commission found post-merger market shares (9-18%) remained constrained by other players in office and retail property markets in Pretoria, Bloemfontein, and surrounding areas.
Cited Statute
Competition Act, 2004 (Act No. 18 of 2004)
Judge Name
- Fiona Tregenna
- Andreas Wessels
- Norman Manoim
Passage Text
- [13] In light of the above, the Commission is of the view that the proposed transaction is unlikely to substantially prevent or lessen competition within the relevant market.
- [17] In light of the above, we conclude that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market... Accordingly, we approve the proposed transaction unconditionally.