Community Property Company And Vukile Property Fund

The judgment

The court's own file

COMPETITION TRIBUNAL OF SOUTH AFRICA Case No.: LM026May21 In the matter between: Community Property Company (Pty) Ltd Primary Acquiring Firm And Ulundi King Senzangakona currently owned by Vukile Property Fund Limited 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 Ms M Mazwai Date Concurring: Prof. Fiona Tregenna and Dr Thando Vilakazi Date: 23 June 2021To: Cliffe Dekker AttorneysCase Number: LM026May21 Community Property Company (Pty) Ltd And Ulundi King Senzangakona Vukile Currently Owned by Property Fund Ltd You applied to the Competition Commission on merger approval in accordance with Chapter 3 of the Competition Act. Your merger was referred to the Competition Tribunal in terms of section 14A of the Act, or was the subject of a Request for consideration by the Tribunal in terms of section 16(1) of the Act. After reviewing all relevant information, and the recommendation or decision of the Competition Commission, the Competition Tribunal approves the merger in terms of section 16(2) of the Act, for the reasons set out in the Reasons for Decision. This approval is subject to: xno conditions.the conditions listed on the attached sheet. The Competition Tribunal has the authority in terms of section 16(3) of the Competition Act to revoke this approval if a) it was granted on the basis of incorrect information for which a party to the merger was responsible. b) the approval was obtained by deceit. c) this approval. The Registrar, Competition Tribunal Notice CT 10 About this Notice This form is prescribed by the Minister of Trade and Industry in terms of section 27 (2) of the Competition Act 1998 (Act No. 89 of 1998). Contacting the Tribunal The Competition Tribunal Private Bag X24 Sunnyside Pretoria 0132 Republic of South Africa tel: 27 12 394 3300 fax: 27 12 394 0169 e-mail: ctsa@comptrib.co.za Merger Clearance Certificate This notice is issued in terms of section 16 of the Competition Act. You may appeal against this decision to the Competition Appeal Court within 20 business days. 1 COMPETITION TRIBUNAL OF SOUTH AFRICA Case no: LM026May21 In the large merger between: Community Property Company (Pty) Ltd (Primary Acquiring Firm) And Ulundi King Senzangakona currently owned by Vukile Property Fund Limited (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 the large merger between Community Property Company (Pty) Ltd (“CPC”) and the letting enterprise known as Ulundi King Senzangakona Shopping Centre, owned by Vukile Property Fund Limited (the “target property”). The target property is located at King Dinuzulu/Princess Magogo Street in Ulundi, northern Kwa-Zulu Natal.

[2]The transaction involves CPC acquiring the target property from Vukile Property Fund Limited, such that CPC will have sole control over the target property post-merger.

[3]CPC is ultimately controlled by Old Mutual Limited ("OML"). 1 The acquiring group through CPC is a property fund with a portfolio made up entirely of retail property, primarily community, small regional and regional shopping centres in rural and township areas in all nine provinces.

[4]The target property is a community centre with a gross lettable area (“GLA”) of 22 365m 2 . It consists of various components such as the main linear mall with line shops, a formal taxi rank, a KFC drive through and a fast-food court. 2

[5]The Competition Commission (“Commission”) found a horizontal overlap in the activities of the merging parties as they are both active in the provision of lettable retail property. However, the Commission found no geographic overlap as the acquiring group does not own lettable centres within a 15km radius of the target property. 3 1 OML controls several firms in South Africa, and is not controlled by any individual shareholder. 2 The target property also houses anchor stores such as Spar, Game and Cashbuild, as well as other tenants that are well-known stores. 3 The nearest lettable retail property owned by the acquiring group is incomparable as it is 70kms away from the target property, and is a convenience centre with a maximum GLA of 5 000m 2 . 2

[6]The Commission concluded that the proposed transaction is unlikely to substantially prevent or lessen competition as there is no geographic overlap between the activities of the merging parties. The Commission also found that the proposed transaction is unlikely to change the structure of the market for comparative rentable shopping centres in Ulundi.

[7]The Commission found that concerns raised by third parties relating to lease negotiations and the management of the target property, were either unaffected by the proposed transaction, or had no bearing on competition or the public interest.

[8]In relation to public interest considerations, the Commission contacted the target property’s employee representative who confirmed that the employees were informed of the proposed transaction and raised no concerns. The Commission found that CPC does not have any employees.

[9]We also note that the merging parties provided an unequivocal statement that the proposed transaction would have no effect on employment, particularly no retrenchments or job losses.

[10]We concluded that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market, or to have a negative impact on the public interest. 23 June 2021 Ms Mondo Mazwai Date Prof. Fiona Tregenna and Dr Thando Vilakazi concurring. Tribunal Case Manager: Peter Kumbirai For the Merging Parties: Albert Aukema of Cliffe Dekker Hofmeyr Inc For the Commission: Yolanda Okharedia and Themba Mahlangu