Commission approves Karan Beef Holdings merger

SOUTH AFRICA – The proposed merger of Karan Beef Holdings with Karan Beef and Karan Beef Feedlot was approved by the Competition Tribunal with certain conditions reports, Fin 24.

Karan Beef Holdings is a newly incorporated special purpose entity, established for the proposed transaction.

Karan Beef is involved in cattle slaughtering, deboning, packaging and selling beef carcasses and cuts while Karan Beef Feedlot purchases calves from breeders and feeds them a special feed until maturity.

The Competition Commission, which assesses large mergers before referring them to the Tribunal for a decision, evaluated the proposed merger and recommended that the merger should be approved with conditions.

According to the Commission, this is aimed at providing a means for historically disadvantaged persons to participate in commercial farming activities.

In September 2018, beef processing firms I&J and Karan Beef were prosecuted by the competition commission for collusion and charged with dividing markets in the supply of processed beef products such as beef burger patties, steak sizzlers, crumbed beef steaklet, viennas and boerewors.

Karan was said to have paid a fine of US$190,354.00 after the commission found out it divided the beef market by allocating customers and specific types of goods, contravening the Competition Act.

During the investigations, it was revealed that, the two firms had from 2000 until recently entered a manufacturing agreement in terms of which Karan Beef would stop producing certain processed beef products for its own account and produce on behalf of I&J.

The agreement further entailed that Karan Beef should not sell certain of its processed beef products to certain customers which were reserved for I&J.

On the other hand, the commission asked the Tribunal to impose an administrative penalty of 10% of I&J’s annual turnover.

However, in October 2018, the Competition Commission said that Karan Beef’s collusion fine was unlikely to affect its buyout deal with the Public Investment Corporation (PIC).

PIC and Pelo Agricultural Ventures had expressed interest of acquiring the Africa’s largest feedlot for US$365 million but the deal was withheld awaiting approval by the Competition Commission.

More News Articles

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.