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Attfund Limited and CapeGate Regional (Pty) Ltd / CapeGate Lifestyle (Pty) Ltd / CapeGate Wholesale (Pty) Ltd / Boness Development Phase 3 (Pty) Ltd (50/LM/Jun06) [2006] ZACT 61 (13 July 2006)
.RTF of original document
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 50/LM/Jun06
In the matter between:
Attfund Limited Acquiring Firm
And
CapeGate Regional (Pty) Ltd
CapeGate Lifestyle (Pty) Ltd
CapeGate Wholesale (Pty) Ltd
Boness Development Phase 3 (Pty) Ltd Target Firms
Panel
:
D Lewis (Presiding Member), N Manoim (Tribunal
Member) and U Bhoola (Tribunal Member)
Heard on
:
12 July 2006
Decided on
:
13 July 2006
Reasons for Decision
APPROVAL
[1]
On 13 July 2006, the Tribunal approved the merger between Attfund Limited and CapeGate Regional (Pty) Ltd and others. The reasons
for approval follow.
THE TRANSACTION
[2]
The acquiring firm is Attfund Ltd, a property investment vehicle for three property development companies, viz. Atterbury Properties,
Parkdev and Gryphon, which form part of the Attfund group. The target firms are CapeGate Wholesale (Pty) Ltd, CapeGate Lifestyle (Pty) Ltd and a joint venture consisting of CapeGate Regional
(Pty) Ltd (60%) and Boness Development Phase 3 (Pty) Ltd (40%).
[3]
In terms of the proposed transaction, Attfund will purchase the assets, meaning the properties and business, of the target firms (all
being rental enterprises). According to the parties, the merger will improve the quality of Attfund’s property portfolio and
will also strengthen its foothold in the Western cape.
IMPACT ON COMPETITION
[4]
Attfund’s current property portfolio consists of retail, industrial and office property, primarily in Gauteng and the Western
Cape. The target firms’ properties are retail properties and are situated in Brackenfell in the Cape Peninsula, Western Cape
Province.
[5]
Attfund has two retail properties in the Western Cape - neither of which is situated in the Cape Peninsula. The first is situated
in George - the Garden Route Mall; the second in Somerset West - Somerset Value Mart. Since the property situated in George is some
435km from the CapeGate properties, it does not raise any concerns.
[6]
With regard to Attfund’s Somerset West property, the parties argued during the hearing that the Somerset Value Mart is a value
mart and therefore does not compete with or constrain the CapeGate properties, which they submit are primarily regional shopping
centres. Since these properties are geographically situated 40-50km apart, we do not need to make a definitive finding on the relevant
product market, as we are satisfied that it is not likely that they compete based on geographic location. However, even if we had
to define a broad market for retail property in the western cape, we are satisfied that the acquisition does not raise any concerns.
[7]
The change in market share of the broader Western Cape market is nevertheless reflected in the table below:
|
Gross Letting Area |
% Market share |
| Total GLA for commercial retail property in the Western Cape |
1 244 893 m2 |
100 % |
| Attfund |
Garden Route Mall (George)
Somerset Value Mart (Somerset West) |
53 135 m2 |
5.28 % |
|
|
| 12 566 m2 |
|
| Cape Gate |
88 500 m2 |
7.11 % |
| Post merger |
154 201 m2 |
12.39 % |
CONCLUSION
[8]
There are no public interest issues and we accordingly approve this transaction without conditions.
____________________
N Manoim
D Lewis and U Bhoola concurring.
Tribunal Researcher:
M Murugan-Modise
For the merging parties:
Advocate A Coetzee instructed by Roestoff Venter & Kruse
Attorneys
For the Commission
:
HB Senekal (Mergers and Acquisitions)
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