SOUTH AFRICA – The Minister of Economic Development has announced that an agreement has been reached with The Coca-Cola Company on a package of conditions as the creation of Coca-Cola Beverages Africa proceeds to the next stage.
The conditions address public interest considerations in connection with its proposed acquisition of a 54.5% interest in Coca-Cola Beverages Africa (‘CCBA’) and the planned subsequent acquisition of the controlling interest in CCBA by a new controlling shareholder.
According to Coca-Cola, the commitments will be presented to the South African Competition Commission and Competition Tribunal for approvals of both proposed transactions, which were originally announced by the company on 21 December 2016.
These commitments include Coca-Cola’s commitment to abide by all the merger conditions agreed with the South African Competition Authorities at the time of CCBA’s formation in 2016.
Coca-Cola has also assured the authorities that the new controlling shareholder of CCBA, once finalised, will likewise agree to be bound by the CCBA merger conditions and the agreement reached with the South African Government.
On community empowerment, the company has greed to increase and maintain the black economic empowerment equity ownership at Coca-Cola Beverages South Africa to 30% by no later than 2021 in recognition of the imperative to drive transformation and inclusive economic growth in South Africa.
This will replace the previously committed level of 20% to be implemented by 2021 and will include an appropriate level of worker/employee ownership.
Coca-Cola has also agreed to extend the commitment to maintain the level of CCBA employment in South Africa for a further three years from the conclusion of the planned acquisition of the controlling interest in CCBA by a new controlling shareholder.
The company has also committed that after the transaction, CCBA will remain incorporated and tax resident in South Africa and its head-office will remain in South Africa.
It will also continue to develop a pipeline of local South African talent for leadership positions at the management and corporate governance levels, with a particular focus on transformation.