The transaction will see Mergence take control over six retail centres– four of them are classified as convenience centres and the other two as neighbourhood centres – located in Soweto and Hammanskraal.
“The Commission found that the proposed merger is unlikely to substantially prevent or lessen competition in the market for the provision of rental space in convenience centres, and does not raise public interest concerns.”
The commission, however, did highlight the concern over the current exclusivity clause in Lease Agreements of five of the Target Properties. These properties include: Meadowpoint Shopping Centre, Proteapoint Shopping Centre, Dopsonpoint Shopping Centre, Pimville Square Shopping Centre and Kubube Shopping Centre.
“The Commission is of the view that the exclusivity clauses have the effect of precluding small businesses and competitors of the anchor tenants, as it is unlikely that the anchor tenants will give permission to lease space to its competitors.”
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The commission approved the merger on condition that the merging parties come up with an agreement with their tenants to remove the exclusivity clause in their Lease Agreements within 60 days of the Commission’s decision.