---

COMPETITION TRIBUNAL OF SOUTH AFRICA

Case No.: LM020May21

In the matter between:

The Government Employee Pension Fund

(represented by the Public Investment Corporation SOC Ltd)                         Primary Acquiring Firm

And

The Leasehold Rights (and obligations) in respect of the immovable

property situated at Erf 4525 Jukskei View Extension 89 Township

and letting enterprise that is being conducted in respect of the building(s)

erected thereon                                                                                                   Primary Target Firm

Panel:                         M Mazwai (Presiding Member)

                                   F Tregenna (Tribunal Panel Member)

                                   T Vilakazi (Tribunal Panel Member)

Heard on:                   23 June 2021

Order Issued on:         23 June 2021

ORDER

Further to the recommendation of the Competition Commission in terms of section 14A(1)(b) of the Competition Act, 1998 (“the Act”) the Competition Tribunal orders that–

1.    the merger between the abovementioned parties be approved in terms of section 16(2)(a) of the Act; and

2.    a Merger Clearance Certificate be issued in terms of Competition Tribunal Rule 35(5)(a).

                                                                                                                             23 June 2021

Presiding Member                                                                                                    Date

Ms Mondo Mazwai

Concurring: Prof. Fiona Tregenna and Dr. Thando Vilakazi

COMPETITION TRIBUNAL OF SOUTH AFRICA

Case no: LM020May21

The Government Employee Pension Fund (represented by the Public Investment

Corporation SOC Limited) (Primary Acquiring Firm)

and

The Leasehold Rights (and obligations) in respect of the immovable property

situated at Erf 4525 Jukskei View Extension 89 Township and the letting enterprise

that is being conducted in respect of the building(s) erected thereon (Primary Target

Firm)

Heard on:                         23 June 2021

Order Issued on:              23 June 2021

REASONS FOR DECISION

[1]            On 23 June 2021, the Competition Tribunal unconditionally approved a large merger whereby the Government Employee Pension Fund (represented by the Public Investment Corporation SOC Limited) (the “GEPF”) intends to acquire the Leasehold Rights (and obligations) in respect of the immovable property situated at Erf 4525 Jukskei View Extension 89 Township (the “Deloitte Property”) and letting enterprise that is being conducted in respect of the building(s) erected thereon (the “Deloitte Property Business”), as a going concern.[1]

[2]            The GEPF is not controlled by any firm, but is managed by the Public Investment Corporation SOC Limited (the “PIC”), which is wholly owned by the South African Government. The GEPF controls a number of firms, none of which are relevant to this transaction.[2]

[3]            Pre-merger, the Target Firm is jointly controlled by Dale Creek Investments (Pty) Ltd and Attacq Waterfall Investment Company (Pty) Ltd, and does not control any firm.

[4]            The GEPF Group is a ‘defined-benefit fund’ which manages pensions and related benefits on behalf of government employees in South Africa, investing in a variety of asset classes and businesses within various industries. Of relevance, is the fact that the GEPF Group owns office properties or has interests in firms that are active in the property sector, namely through the ownership and/or provision of rentable office space in the Gauteng province.

[5]            The Deloitte Property has a gross lettable area of 44,265m2 that is classified as Grade P (premium) office space, and which is in terms of the Deloitte Lease, currently being leased exclusively to Deloitte for a period of 12 years, ending on 31 March 2032.[3]

[6]            In its competition assessment, the Competition Commission (the “Commission”) found that there are no horizontal overlaps as the GEPF Group does not own or have interests in firms that own Grade P office space, that could be considered a competitor of the Target Firm, and the Deloitte Lease establishes Deloitte as the sole tenant in the Deloitte Building. In addition, the Commission found no vertical overlaps in the activities of the merging parties as none provide a product or service that could be deemed as an input in the business activities of the other. The Commission concluded that the proposed transaction is unlikely to substantially lessen or prevent competition in any South African market.

[7]            The proposed merger raises no public interest concerns, and no third parties raised any concerns. Further, the merging parties provided an unequivocal statement that there will be no retrenchments as a result of the merger.

[8]            In light of the above, we concluded that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market. In addition, no public interest issues arise from the proposed transaction.

                                                                                                              23 June 2021

Ms Mondo Mazwai                                                                                    Date

Dr Thando Vilakazi and Prof. Fiona Tregenna concurring

Tribunal Case Manager:                             Camilla Mathonsi

For the Merging Parties:                           Darren Smith, HB Senekai, Duran Naidoo and Jeremy de Beer of ENSafrica

For the Commission:                                  Rethabile Ncheche and Ratshidaho Maphwanya

[1] Collectively referred to as the Target Firm.

---