SOUTH AFRICA – American multinational food and beverage company, PepsiCo, is going for the remaining 50% shares at Futurelife Health Products, a functional food company, through the subsidiary of PepsiCo South Africa, Pioneer Foods.
The proposed transaction sees Pioneer Foods purchasing the 50% shareholding in Futurelife owned by the food company’s founder Paul Saad.
Saad founded Futurelife in 2007. The original Futurelife Smart Food (which remains the company’s flagship product) was developed as a scientifically formulated, balanced, nutritious, convenient food that contains Moducare, a daily immune supplement made from a patented blend of plant sterols and sterolins.
Pioneer Foods, one of the largest South African producers and distributors of a range of branded food and beverage products, bought an initial 50% interest in Futurelife Health Products in 2015.
Pioneer Foods acquired its initial 50% of the issued shares in Futurelife in 2015, and the conditions attached to the approval of that transaction were that for five years, the two businesses be administered independently from each other. This condition expired in November 2020.
Since March 2020, Pioneer Foods has been a wholly owned subsidiary of Simba Proprietary Limited, which, in turn, is wholly owned by PepsiCo.
PepsiCo’s operations in South Africa are organized into five categories: Bakeries, Grains, Snacks (including fruit), Foods and Beverages, and Futurelife will be a wholly-owned subsidiary of Pioneer Foods. With the acquisition, Futurelife will be a wholly-owned subsidiary of Pioneer Foods.
The transaction, which is subject to some administrative condition’s precedent, is expected to close and be effective in the first week of July.
Earlier this month, the South African Competition Commission recommended the conditional approval of the acquisition.
The Commission’s recommendation was then considered by the Competition Tribunal, which went on to issue its order to approve the merger on 29 May 2023.
“Futurelife is an innovative brand within the cereals market, and we believe its product basket will complement our current portfolio. Upon closing of the transaction, we look forward to welcoming the Futurelife employees into PepsiCo,” said PepsiCo South Africa CEO Riaan Heyl.
This will also mean that qualifying employees will be entitled to participate in our employee share ownership scheme, the Basumi Trust.”
The commission found that the transaction does not raise any competition concerns as Pioneer Foods is already in a position of joint control over Futurelife, and Pioneer Foods and Futurelife compete with several large players in the market for ready-to-eat-cereals.
The commission confirmed that the proposed transaction does not raise any public interest concerns that are not addressed through this undertaking, which promotes a greater spread of ownership by employees, PepsiCo South Africa noted.