Clover takeover: Competition Tribunal gives Israeli-led group the final go-ahead
The Competition Tribunal has given the go-ahead to a takeover of SA's biggest dairy company, Clover.
The R4.8bn takeover deal is subject to a range of conditions, the Tribunal said. These include employment, local procurement and information sharing conditions.
A consortium led by Milco, based in in Tel Aviv and owned by Central Bottling Company, made the offer to buy out Clover at R25 a share in February 2019. Other investors included Brimstone Investment, which in April pulled out following a protest by pro-Palestinian activist groups.
In its statement on Wednesday (25/09/2019), the Tribunal said it had initially had concerns about the impact 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.
Clover has previously told Fin24 Project Sencillo is unrelated to the merger. It also said it had managed to reduce net job losses to a maximum of 277 positions.
This is partly because Milco has undertaken to to create 550 new permanent jobs over a period of five years from the 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, Fin24 previously reported.
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 (this excludes Project Sencillo) 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 respectively, the Tribunal said.
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.
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.
Compiled by Marelise van der Merwe