The merger, if approved, would create the largest property loan stock company listed on the JSE Securities Exchange. With combined assets of R5 billion and a market capitalisation of R3 billion, the merged Growthpoint would be among the top 50 listed companies.

Nkonzo Hlatshwayo, the manager of the commission's merger and acquisition's division, said yesterday the division had identified seven relevant markets in its analysis of the transaction but the shares of the merging parties in all markets were relatively low.

"Accordingly, we believe it highly unlikely that the merger would substantially prevent or lessen competition," Hlatshwayo said.

Earlier this month the merger received overwhelming support from the shareholders of both companies.

Sam Leon of Investec Property Group, the manager of Growthpoint, said at the time that Primegro shareholders had approved the voluntary winding up of Primegro and that Growthpoint linked units would be distributed to Primegro linked unit holders as a liquidation dividend.

Leon said a 99 percent majority of institutions and individual linked unit holders voted in favour of this resolution, which clearly reflected investor and shareholder confidence and support.

He said the cash portion of the deal would be raised in part by a new share issue of R300 million at R5.30 a linked unit, in terms of an issue of shares for cash.

However, he said, due to the unprecedented demand for the new Growthpoint linked units and the fact that the issue was 2.5 times oversubscribed, Growthpoint had raised an additional R200 million.

The merged fund would consist of about 17 percent of the combined market capitalisation of the property unit trust and property loan stock sectors. "This will set new benchmarks for listed property funds, creating critical mass, higher liquidity and a spread of risk both sectorally and geographically," Leon said.

The Competition Tribunal was scheduled to consider the merger at a hearing tomorrow. But Shan Ramburuth, the tribunal's chief executive, said yesterday no witnesses would be called because nobody was contesting the merger and no evidence would be heard.

The share price of both companies was unchanged yesterday, with Growthpoint at R6 and Primegro at R7.02.