The Competition Tribunal has unconditionally approved the large merger whereby Growthpoint Properties will acquire Joburg Stay from Feenstra Group.
This transaction involves an internal reorganisation of the Feenstra Group.
As such, the target firms are Joburg Stay, seven Gauteng student accommodation properties and their rental enterprises that Joburg Stay will wholly own.
Post-merger, Growthpoint will have control over Joburg Stay through its ability to appoint a majority of the board members.
In its competition analysis, the tribunal concluded that the merger was unlikely to substantially prevent or lessen competition in any market in South Africa as the transaction will not result in any market share accretion or any change in the competitive landscape in any relevant market.
In addition, the tribunal found that there was no vertical overlap between the merger parties’ activities as they do not participate at different levels of the same supply chain.
It added that the merger was “unlikely to create a platform for the exchange of competitively sensitive information to the detriment of competition in the rentable office space market”.
The merger will not have an impact on employment and the tribunal said that it was likely to promote a greater spread of ownership by historically disadvantaged persons (HDPs) in the market as Joburg Stay will benefit from the shareholding by HDPs in Growthpoint.