Automated Summary
Key Facts
The Competition Tribunal of South Africa unconditionally approved the proposed merger between Futuregrowth (acting for Old Mutual Life Assurance) and Citiq Treasury/Citiq Property Services. The merger involves acquiring shares in property holding and management companies. The Commission found no significant competition concerns in four markets: rentable office space, convenience centres, residential space, and student accommodation. Post-merger market shares in key areas (Berea, Hillbrow, Rosettenville) remain below 20%, with sufficient competitors to maintain market constraints. The Tribunal concluded the transaction would not substantially prevent or lessen competition, and no public interest issues were identified.
Issues
- The Tribunal reviewed the student accommodation market in the Johannesburg CBD, where the merged entity's market share was calculated as less than 15%. Competitors identified include Respublica, MMI Property Management, and universities. The Commission concluded the merger would not substantially harm competition.
- The Competition Tribunal assessed whether the merger between Futuregrowth and Citiq would create anti-competitive effects in the rentable office space market. The Commission found no geographic overlap in office properties owned by the merging parties.
- The Tribunal evaluated the impact of the merger on the convenience centres market, specifically the 27 Boxes property in Melville. The Commission concluded the merged entity's post-merger market share would be below 20%, with nearby competitors like Campus Square Shopping Centre.
- The Tribunal considered the merger's effect on residential property markets in Berea, Bellevue, Hillbrow, and Rosettenville. Post-merger market shares were found to be below 20% in Berea and Hillbrow, and below 5% in Rosettenville, with numerous alternative property owners in each area.
Holdings
- In residential space markets (Berea, Bellevue, Hillbrow, Rosettenville), the merged entity's post-merger shares are below 20% (Berea, Hillbrow) and 5% (Rosettenville). Numerous alternative property owners exist to limit market power.
- For convenience centres, the merged entity's post-merger market share is below 20% in the 8 km radius around 27 Boxes. Competitors like Campus Square and Northcliff Corner will continue to constrain the merged entity.
- Student accommodation in the Johannesburg CBD: the merged entity's market share is below 15%, with competitors including Respublica, MMI Property Management, and universities. The Tribunal confirmed the Commission's conclusion of no substantial competition concerns.
- The Competition Tribunal unconditionally approved the proposed transaction involving Futuregrowth, Citiq Treasury, and Citiq Property Services. The Tribunal found that the merged entity's post-merger market shares in all relevant markets (rentable office space, convenience centres, residential space, and student accommodation) are below thresholds that would substantially prevent or lessen competition. Competitors in each market were identified, and no public interest concerns were raised.
- No public interest concerns were identified, including no negative employment effects from the transaction.
- In the market for rentable office space, the Commission found no geographic overlap between the merging parties' properties. The merged entity's post-merger market share is below 20%, and no significant competition concerns were identified.
Remedies
The Tribunal unconditionally approved the proposed transaction involving Futuregrowth, Citiq Treasury, and CPS.
Legal Principles
The Competition Tribunal approved the merger based on an assessment that it would not substantially prevent or lessen competition in any relevant market, including analysis of market shares and competitive constraints in specific geographic areas.
Judge Name
- Andreas Wessels
- Medi Mokuena
- Andiswa Ndoni
Passage Text
- [22] 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.
- [14] ... the merged entity's post-merger market share will be below 20% ... below 10% ... below 20% ... below 5% ... numerous alternative residential property owners in each of these areas that will continue to constrain the merged entity post-merger.
- [18] ... the merged entity will have a market share of less than 15% in the provision of student accommodation in the Johannesburg CBD ... Commission identified competitors including Respublica, MMI Property Management, South Point Management Services, the University of Johannesburg and the Witwatersrand University.