RMB Property And Celasys

The judgment

The court's own file

w 4 competitiontribunal COMPETITION TRIBUNAL OF SOUTH AFRICA Case No: LM2120ct17 In the matter between: RMB Property Holdco 1 (Pty) Ltd Primary Acquiring Firm And Celasys (Pty) Ltd Primary Target Firm Panel : Medi Mokuena (Presiding Member) : Fiona Tregenna (Tribunal Member) + Andiswa Ndoni (Tribunal Member) Heard on : 08 November 2017 Order Issued on : 08 November 2017 Reasons Issuedon : 06 December 2017 Reasons for Decision Approval 1] On 08 November 2017, the Competition Tribunal (“Tribunal”) unconditionally approved the transaction involving RMB Property Holdco 1 (Pty) Ltd and Celasys (Pty) Ltd

[2]The reasons for approving the proposed transaction follows. Parties to the proposed transaction Primary acquiring firm

[3]The primary acquiring firm is RMB Property Holdco 1 (Pty) Ltd (“RMBPH1”), a South African firm. RMBPH1 is controlled by RMB Investment and Advisory Proprietary Limited ("RMBIA"). RMBPH1, holds investments in various firms, none of which compete with the activities of the target firm.

[4]RMBPH1 is a property investment holding company that holds investments in Capstone 453, Nomic 163, Micawbr 533 and Born Free Investment.’ Primary target firms

[5]The primary target firm is Celasys (Pty) Ltd (“Celasys”), a South African firm. Currently, Celasys is controlled by Eris (Pty) Ltd (“EPF”).

[6]The only assets that Celasys holds is the Makro building in Nelspruit, Mpumalanga province. The property is subject to a long-term triple net lease with Masstores Proprietary Limited. Proposed transaction and rationale m7 The proposed transaction involves the acquisition of Celasys by RMBH1. RMBH1 will subscribe for 4900 new ordinary shares of R1.00 each in Celasys which will constitute 98% of Celasys' issued share capital. RMBPH1 will also subscribe for preference shares in Celasys for up to an additional R91 700 000, the proceeds of which will be utilised to settle an existing shareholders loan. Post transaction, RMBPH1 will hold the majority of the issued shares of approximately 98% in Celasys and will have control over Celasys. * Please note that none of these firms own lettable warehouses retail property in the Nelspruit area which compete with the Makro building held by the target firm (8)The acquiring firm submits that the proposed transaction presents an attractive investment opportunity because the property is tenanted, and will continue to be tenanted. Celasys, submits that it is reaching the end of its planned fund life and is realising its investment in line with its original mandate Impact on competition (9)

[10]The Competition Commission ("Commission") considered the activities of the merging parties and found that there is no overlap as RMBPH1, and its controllers, do not own any warehouse type retail properties in the Nelspruit area. Furthermore the Commission found that the target property only has a single tenant, Makro and that the target property is currently subject to a long term lease for a period of 15 years, with 14 years remaining. The Commission therefore concluded that the proposed merger is unlikely to lessen or prevent competition in any market as the merging parties do not overlap. We concur with the Commission's finding. Public interest [11]The merging parties confirmed that the proposed transaction will not have any negative effect on employment in South Africa.

[12]| The proposed transaction further raises no other public interest concerns. Conclusion

[13]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 issues arise from the proposed transaction. Accordingly, we approve the proposed transaction unconditionally. Rihotu ar. = December 2017 Mrs Medi Mokuena DATE Prof Fiona Tregenna and Ms Andiswa Ndoni concurring Tribunal Case Manager: Ms Busisiwe Masina Forthe merging parties : Mr Albert Aukema of Cliffe Dekker Hofmeyr For the Commission : Ms Nolubabalo Myoli