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Merger of Libstar and Sonnendal Dairies approved

South African holding company Libstar is to merge with Sonnendal Dairies in the Western Cape following approval by the country’s competition watchdog.

Libstar is controlled by private-equity funds and has interests in a number of companies in South Africa, including within the food and beverage industry. Sonnendal’s main product is yogurt, but it also makes associated dairy products and a range of juices.

The country’s Competition Tribunal cleared the merger yesterday (25 October 2017) after assessing recommendations made by the Competition Commission, which had flagged concern over what it called a restraint of trade clause.

Under that clause contained in the sale of business agreement, Sonnendal cannot operate outside of its existing business scope of Western Cape province for three years.

A statement announcing the merger approval said: “The Tribunal approved the condition whereby Sonnendal will continue to operate in the Western Cape where it predominately operates, but will not operate nationally for a three-year-period”.

The financial details of the transaction have not been disclosed.

You can read the tribunal decision here.

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