SOUTH AFRICA – South Africa’s Competition Tribunal has approved the US$343.95m (R4.8bn) takeover of South Africa’s branded foods and beverages group Clover Industries Limited by Milco SA.
The consortium Milco SA led by Tel Aviv-based Central Bottling Company (CBC) in February this year offered to acquire the south African company, a deal which elicited criticism from NGO Boycott, Divestment and Sanctions (BDS) and trade union Food and Allied Workers Union (FAWU).
This led to Brimstone Investments Corporation, a South African investment firm, pulling out from the deal in which it was set to hold a 15% stake in the country’s largest dairy firm.
CBC operates as Milco SA Proprietary and manufactures and distributes Coca-Cola branded soft drinks and other alcoholic and non-alcoholic beverages in Israel.
The food and beverage firm also own the Tara dairy, Israel’s second-largest milk processing dairy, produces and distributes its own brands and Muller brands, and it operates the licence for the Müller brand in Romania.
The US$343.95 million takeover deal is subject to a range of conditions which include employment, local procurement and information sharing conditions.
To address concerns from local suppliers to Clover of bulk juice concentrate, the merged entity agreed to procure bulk juice concentrate from local suppliers for three years.
In its statement, the Tribunal said it had concerns about the impact of the merger on employment. A total of 516 employees had been set to be retrenched as a result of the completion of Clover’s so-called Project Sencillo, a project aimed at ensuring its assets, including factories, production lines and vehicles, were better utilised.
The Tribunal has put a three-year moratorium on retrenching 516 workers, noting that the number had been subsequently lowered to 277 planned job losses.
This is partly because Milco has undertaken to create 550 new permanent jobs over a period of five years from the approval of the deal through the expansion of Clover’s Masakhane Project, which involves servicing underserved markets such as general traders and spaza shops, reported Fin24.
According to the Tribunal, other employment-related conditions agreed to include that the merged entity will not retrench any employee in SA as a result of the merger and reasonable relocation and training costs will be contributed for affected employees that successfully apply for vacant or new positions in Project Masakhane.
The merged entity would cover the costs of training and relocation up to R5 million (US$334,000) respectively.
Cosatu and the trade union Food and Allied Workers Union (FAWU), as well as the General Industrial Workers Union of South Africa (Giwusa) are opposing the deal, as is the pro-Palestine activist group Boycott Divestment Sanctions SA (BDS SA).
If the takeover proceeds, BDS SA says it will launch “a militant but peaceful campaign”, including protests and disruptions against Clover and a boycott of all its products.
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