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Clover’s R4.8bn deal gets Competition Commission nod

The Competition Commission has approved, with conditions, the R4.8bn sale of branded food-bev group, Clover Industries, to a consortium led by Tel Aviv-based Central Bottling Company.

Clover said the commission had recommended that the Competition Tribunal approve the transaction, which has elicited criticism from NGO, Boycott, Divestment and Sanctions (BDS), and trade union, Food and Allied Workers Union (FAWU).

According to Clover, the conditions relate to, among other things, employment and local procurement “which were part of the investment case for [the consortium.]) Milco SA. The conditions applicable to the implementation of the Clover scheme are acceptable to both parties”.

The company said the tribunal’s hearing on the matter would take place in the coming weeks.

The transaction will culminate in Clover’s de-listing.

Update 29 July – Brimstone out of deal

Investment holding company, Brimstone, has found a replacement BEE investor for its 15% stake in Clover, SA’s biggest dairy producer.

Brimstone was due to participate in a consortium, which in early February announced a R4.8bn offer to acquire 100% of Clover.

However it caved in to pressure from pro-Palestine activist group BDSA who opposed the deal because the consortium was led by Tel Aviv-based Central Bottling Company.

After the proposed deal was announced BDSA threatened to instigate a boycott of Clover. The organisation said there would be “direct action and a militant but peaceful campaign” if the transaction proceeded.

Shortly afterwards Brimstone indicated it would pull out of the transaction, saying it had noted “widespread outrage” over its proposed participation in the deal.

At the end of April the Cape-based BEE group formally announced it was withdrawing from the transaction. It was given until December 31 to secure a replacement BEE investor or it would have to sell its 15% to International Beer Breweries, a subsidiary of Central Bottling Company.

On Friday 26 July, Brimstone announced that BEEMilk — an entity representing a consortium of investors comprising Khulasande Capital, Global Capital Empowerment Fund and Ubisi Noju — would be replacing Brimstone in the Clover consortium.

Limited information on the members of BEEMilk is available, but Khulasande and Global Capital Empowerment Fund appear to have links with Investec. Fani Titi, joint CEO of Investec, is part of Khulasande’s “team”, as is former Investec CEO Stephen Koseff. Investec is a 25% shareholder in Global Capital Empowerment Fund.

Brimstone said the aborted bid to become a significant shareholder in Clover cost it R62.3m, equivalent to 25.7c a Brimstone share.


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