You are here:
SAFLII >>
Databases >>
South Africa: Competition Tribunal >>
2007 >>
[2007] ZACT 62
[Database Search]
[Name Search]
[Recent Decisions]
[Noteup]
[Help]
Airports Company South Africa and Denel (Pty) Ltd & Another (55/LM/May07) [2007] ZACT 62 (11 September 2007)
.RTF of original document
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 55/LM/May07
In the matter between:
Airports Company South Africa Acquiring Firm
And
Denel (Pty) Ltd
Target Firms
Aero Eiendomme (Pty) Ltd
Panel
:
D Lewis (Presiding Member), Y Carrim (Tribunal
Member) and
M Mokuena (Tribunal Member)
Heard on
:
20 July 2007
Order issued on
:
20 July 2007
Reasons issued on
:
11 September 2007
Reasons for Decision
Approval
[1]
On 20 July 2007, the Tribunal approved the merger between Airports Company South Africa Ltd and Denel (Pty) Ltd and Aero Eiendomme (Pty) Ltd. The reasons
follow below.
The Transaction
[2]
The transaction involves the disposal by Denel (Pty) Ltd (“Denel”) and Aero Eiendomme (Pty) Ltd (“Aero”) of certain properties located adjacent the O.R. Tambo International Airport to Airports Company South Africa (Ltd) (“ACSA”).
[3]
The primary acquiring firm is ACSA which is controlled by The Minister of Transport of the Republic of South Africa (“the State”)
holding 74,6% of the shares in ACSA and ADRIASA holding 20% of the shares in ACSA. ADRIASA is 100% controlled by the Public Investment
Corporation Ltd (“PIC”). ACSA has exclusive control over the assets and liabilities of nine airports in South Africa,
one of which is the OR Tambo International Airport.
[4]
The primary target firms are Denel and its wholly owned subsidiary Aero. Denel is a private company, incorporated in terms of the
Companies Act 61 of 1973 and the Government is the sole shareholder. Denel is managed by a Board of Directors, appointed by the Minister
of Public Enterprises and it is involved in the aviation and military industries.
[5]
The Government controls both the acquiring and target firms.
Rationale for the transaction
[6]
ACSA requires land, inter alia, for the construction of a new runway, for the provision of airline maintenance and support facilities and for other
aviation related commercial development whilst the transaction will strengthen Denel’s financial liquidity.
[7]
Subsequent to this transaction ACSA will lease the properties back to Denel for a period of 5 years after which it will demolish most the office
properties for purposes of constructing a runway and other related airport infrastructure.
The relevant market and the impact on competition
[8]
The overlap between the parties’ property portfolios are in Industrial properties and Grade B and C Office Space properties in the Kempton Park node, specifically
the area adjacent to OR Tambo Airport.
[9]
Although the merged firm will initially hold a market share of 31%, i.e. 376 032 m?, in the industrial properties market immediately after the transaction this will decrease to only 16%, i.e. 87 860m?, when the buildings are demolished to build the new runway. With regard to the office properties none will remain and the market
share will thus drop from 59% to zero after the lease agreement with Denel expires in 5 years.
[10]
In light of the above we find that the transaction would not substantially prevent or lessen competition the relevant markets.
CONCLUSION
[11]
There are no significant public interest issues and we accordingly approve the transaction.
____________________
11September 2007
D Lewis
Date
Y Carrim and M Mokuena concurring.
Tribunal Researcher:
R Badenhorst
For the merging parties:
Hofmeyr Herbstein & Gihwala Inc
For the Commission:
Leonard Lamola & Acquisitions)
SAFLII:
|
Terms of Use
|
Feedback
URL: http://www.saflii.org/za/cases/ZACT/2007/62.html
