Trident Property Holdings And Trident Property Portfolio

The judgment

The court's own file

1 COMPETITION TRIBUNAL REPUBLIC OF SOUTH AFRICA Case No.: LM019Apr25 In the matter between: Trident Property Holdings Proprietary Limited Primary Acquiring Firm and The Trident Property Portfolio of Dimopoint Proprietary Limited Primary Target Firm Introduction [1]On 9 June 2025, the Competition Tribunal (“Tribunal”) unconditionally approved a large merger wherein Trident Property Holdings (Pty) Ltd (“TPH”) intends to acquire the Trident Property Portfolio of Dimopoint (Pty) Ltd (“Dimopoint”) which comprises Trident Steel Germiston; Trident Steel Gqeberha; and Trident Steel Durban, collectively referred to as the “Target Properties”. [2]After implementation of the proposed transaction, TPH will have sole control of the Target Properties. Panel :I Valodia (Presiding Member) :A Ndoni (Tribunal Member) :G Budlender (Tribunal Member) Heard on :09 June 2025 Order issued on :09 June 2025 Reasons issued on :03 July 2025 REASONS FOR DECISION 2 The parties and their activities Primary acquiring firm [3]The primary acquiring firm, TPH, is a special purpose vehicle established for the purposes of the proposed transaction. [4]TPH will be controlled by Deventon Property Investment Holdings (Pty) Ltd (“DPIH”) DPIH will be controlled by SAF Metal Holdings LLC and TriCo Industrial (Pty) Ltd (“TriCo Industrial”). [5]TriCo Industrial, a special purpose vehicle incorporated in South Africa, is not controlled by any person(s) or firm(s) and is held by the following firms: [6]TPH comprises a consortium of shareholders who are currently the only shareholders of TSA as well as a non-controlling shareholder that is TSA's majority shareholder, Trident Steel Holdings Proprietary Limited. [7]TPH, DPIH and TriCo Industrial do not conduct any business activities. Primary target firm [8]The primary target firm is Dimopoint which comprises the following rentable industrial properties (“Target Properties”): 8.1Marthunisen Road, Roodekop, Germiston. The gross lettable area (“GLA”) of these premises is 120,980m², of which 85,345 m² (70%) is occupied by TSA; 8.2Uitenhage Road/R75, Struandale, Gqeberha. The GLA of these premises is 30,193m². TSA occupies the entire premises; and 8.3Joyner Road, Prospecton, Durban. The GLA of these premises is 9,767m². TSA occupies the entire premises. 3 [9]The Target Properties are controlled by Dimopoint. Dimopoint is wholly owned and controlled by Collins Property Group Limited. [10]The Target Properties do not control any firm(s). Description of the transaction and rationale [11]The proposed transaction entails TPH acquiring the Target Properties from Dimopoint. After implementation of the proposed transaction, TPH will have sole control of the Target Properties. [12]The Target Properties are currently occupied by TSA and will continue to be occupied by TSA post-merger. TPH and TSA are wholly owned by common shareholders. As such, the merger parties submit that the purpose of the proposed transaction is to reduce TSA’s rental/leasing costs by acquiring the rental industrial properties occupied by TSA. Post-merger, TPH will become the landlord of TSA. [13]In terms of the rationale for the proposed transaction, Competition assessment Indivisibility assessment [14]The Commission considered whether the proposed merger constitutes a single indivisible transaction and found that the proposed transaction constitutes a single indivisible transaction. This is because the Target Properties have a common seller, Dimopoint and a common buyer, TPH; the Target Properties are involved in the same or interrelated lines of business as they are all rentable industrial properties; and the proposed transaction is concluded under a single agreement 4 (sale of rental properties agreement) and the Target Properties cannot be sold separately. [15]Both a factual and legal basis exist to consider the transaction as indivisible, therefore, we are satisfied that the transactions are indivisibly linked. Product market [16]The relevant product market comprises the rental of industrial property. Industrial property comprises property used for industrial purposes such as such as factories, warehouses, and industrial yards, with different sizes and features. Geographic market [17]The geographic market for industrial property is expansive, covering a wide area. This is because a key factor of industrial property is easy access to a highway. This means that firms can consider industrial premises in geographically dispersed regions (such as different areas of a broad metropolitan region), because as long as there is access to a highway, premises in different areas can typically be used for the same substitutable purpose. 1 [18]The Commission did not arrive at a definitive conclusion as to the scope of the relevant geographic market, however, given the areas in which the Target Properties are situated, the relevant geographic markets would comprise at least the broader southern and eastern regions of Johannesburg, the broader Gqeberha region and the broader Durban region. Overlaps [19]There is no horizontal overlap between the activities of the merger parties. This is because the acquiring group does not own any rentable industrial property and is not involved in the market for the provision of rentable industrial property in competition with Dimopoint / Target Properties. 1 Merger Parties’ competitiveness report at para 7.2 on p56 of Merger Record. 5 [20]The Target Properties are currently occupied by TSA and will continue to be occupied by TSA post-merger. [21]TSA currently sub-lets 15.4% of Trident Steel Germiston GLA to third-party sub- tenants on an ad hoc basis. The merger parties submitted that the proposed transaction will have no effect on the sub-tenants leasing the Trident Steel Germiston industrial property. This is because TSA does not intend to change the use of Target Properties and the purpose of the proposed transaction is intended to reduce TSA’s rental/leasing costs by acquiring (through TPH) the Target Properties. As such, the leases between TSA and its sub-tenants will remain unchanged post-merger. [22]The proposed transaction results in a vertical relationship between TPH and TSA. This is because TSA will become a tenant of TPH and TPH will become a landlord of TSA (i.e., landlord-tenant relationship). [23]However, TPH and TSA are wholly owned by common shareholders and, the merger parties submitted that the proposed trans-action is intended to reduce TSA’s rental/leasing costs by acquiring (through TPH) the rental industrial properties occupied by TSA. As such, the proposed transaction is unlikely to raise any input foreclosure and/or customer foreclosure concerns. [24]In light of this, the Commission is of the view that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market(s). [25]We found no basis to disagree and concluded that the proposed transaction was unlikely to result in a substantial prevention or lessening of competition in any relevant markets. Public interest Effect on employment [26]The merger parties submitted that the proposed transaction would have no adverse effect on employment in South Africa. In particular, the merger parties 6 provided an unequivocal undertaking that the proposed transaction would not result in any job losses. 2 [27]TPH and the Target Properties do not have any employees. However, the employees of TSA are represented by the National Union of Metalworkers of South Africa (“NUMSA”), Solidarity and Ms Ipeleng Mafa. [28]During the Commission’s investigation, NUMSA submitted that the employees they represent at TSA were not notified of the proposed transaction. Considering this, the Commission requested the merging parties to notify NUMSA about the proposed transaction and provide proof thereof. In response, the merging parties provided evidence that NUMSA was notified of the proposed transaction and served with the non-confidential version of the merger filing on 22 April 2025 and 7 May 2025. The Commission then informed NUMSA that the merging parties provided evidence that NUMSA was notified of the proposed transaction and requested NUMSA to notify the employees it represents, to the extent that they were not notified. In addition, the Commission informed NUMSA that the merging parties provided an unequivocal undertaking that there will be no retrenchments or job losses as a result of the proposed transaction. However, NUMSA indicated that they will be able to respond to the Commission after they have a meeting with TSA. [29]We queried whether NUMSA had any employment concerns following its meeting with TSA but were provided with a submission that there were no employment concerns following the meeting with NUMSA’s members. 3 [30]Given the unequivocal undertaking by the merging parties that the proposed transaction will have no adverse effect on employment, the Commission found that the proposed merger is unlikely to raise any employment concerns. [31]Considering the above, we concluded the merger raises no employment concerns. 2 Merger Parties’ competitiveness report at para 12.2 on p62 of Merger Record. 3 Submission from NUMSA to the Commission dated 21 May 2025. Provided to the Tribunal on 6 June 2025. 7 Effect of the promotion of greater spread of ownership by historically disadvantaged persons (HDPs) [32]The Commission found that TPH will have % of its shareholding held by HDPs and the Target Properties do not have any shareholding held by HDPs. As such, the HDP shareholding of the Target Properties will increase from % to [33]We concluded that the proposed transaction does not have a negative effect on the promotion of a greater spread of ownership. [34]We found further that the proposed transaction does not raise any other public interest issues. Third party views [35]No third parties contested the proposed transaction. Conclusion [36]For the reasons set out above, we concluded that the proposed transaction was unlikely to substantially prevent or lessen competition in any relevant market. We concluded further that the proposed merger does not raise any significant public interest concerns. [37]We therefore unconditionally approved the proposed transaction. 03 July 2025 Prof. Imraan Valodia Date Adv. Geoff Budlender SC and Ms Andiswa Ndoni concurring. Tribunal Case Manager: Juliana Munyembate For the Merger Parties: Paul Cleland and Kwanele Diniso of Werksmans Attorneys The Commission found that TPH will have % of its shareholding held by such, the HDP shareholding of the Target Properties will increase from % to Signed by:Imraan Valodia Signed at:2025-07-03 14:29:45 +02:00 Reason:Witnessing Imraan Valodia 8 For the Commission: Nhlakanipho Mbhense and Betty Mkatshwa