Last month, Discovery announced plans to purchase its head office, 1 Discovery Place, in Sandton, for R4.05 billion, which will result in an initial annual cash‑flow saving of R800 million over the remaining lease period.
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The property transaction involving the Discovery Group’s head office in Sandton, Gauteng, has been approved without conditions.
This was announced by the Competition Tribunal on Wednesday morning.
It said that in terms of the transaction: Discovery Propco will acquire Sections 2 and 3 of the sectional title scheme known as 1 Discovery Place from Growthpoint and the Truzen 114 Trust; and Growthpoint Properties will, at the same time, acquire Section 1 from the same trust.
Discovery Propco, a new entity established for the transaction, is a wholly owned subsidiary of Discovery, which is a public company listed on the Johannesburg Stock Exchange (JSE).
While the group (best known for its presence across healthcare, insurance, banking and wellness) does not own office property in South Africa, Discovery Central Services, which forms part of the Discovery Group, is an existing tenant at Discovery Place.
Growthpoint is a property investment holding company, classified as a Real Estate Investment Trust (REIT), which is listed on the JSE. It invests in retail property in major urban centres and retains a diversified fund through investments in quality office nodes and in industrial parks.
Discovery Place features three linked towers over numerous office levels and basement floors, limited retail space, as well as conference and wellness facilities.
Earlier this month, the Commission announced that it has recommended that the Competition Tribunal approve the proposed transaction whereby Discovery Propco will acquire Sections 2 and 3 of the property known as 1 Discovery Place from Growthpoint and the Truzen 114 Trust, while Growthpoint will, at the same time, acquire the remaining undivided share in Section 1 of the same property from the Truzen 114 Trust, all without conditions.
Siyabulela Makunga, spokesperson at the Competition Commission of South Africa, said the first acquiring firm is Discovery Propco, a wholly owned subsidiary of Discovery.
He said Discovery is not controlled by any single shareholder and has interests in several firms in South Africa. Discovery Propco does not control any other firm.
Discovery, Discovery Propco, and all firms controlled by Discovery will be referred to as the Discovery Group.
The Discovery Group is a financial services firm that operates in the healthcare, life insurance, short-term insurance, long-term savings, banking and wellness markets.
The Commission said the second acquiring firm is Growthpoint, a real estate investment trust. Growthpoint is not controlled by any single shareholder and controls several firms in South Africa. For purposes of this transaction, Growthpoint and all firms under its control will collectively be referred to as Growthpoint.
The target properties comprise Section 1 (“the Ridge”), Section 2 (“the Park”), and Section 3 (“the Grove”) of the property known as 1 Discovery Place (“Target Properties”).
Before the proposed transaction, the Target Properties were jointly owned and controlled by Growthpoint and the Truzen 114 Trust. The Target Properties do not control any firms.
The Commission is of the view that the proposed transaction is unlikely to substantially lessen or prevent competition in any relevant market, Makunga said. He added that the proposed transaction does not raise significant public interest concerns.
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