Milco-Clover merger approved, with conditions
The Competition Tribunal has approved the merger between Milco South Africa (SA) and Clover Industries, subject to a range of employment, local procurement of bulk juice concentrate, and information sharing conditions.
Clover in February announced that it had received a buyout offer of R25 a share from Milco SA, a new company established by a consortium of investors, primarily Tel Aviv-based CBC, and the management of Clover. The offer valued Clover at about R4.8-billion.
The Competition Commission in July recommended to the tribunal that it approve the transaction, but with conditions.
The tribunal initially had concerns about the merging parties’ tendered employment-related conditions in terms of which 516 workers would be retrenched as a result of the completion of Project Sencillo, a Clover project launched in 2017 to ensure the better utilisation of its assets, the completion of which was expected to take up to five years.
The merging parties further tendered to not retrench any employees as a result of the completion of Project Sencillo for a period of two years from the implementation date of the proposed merger.
The merging parties later reduced the number of expected retrenchments as a result of the completion of Project Sencillo to 277. The tribunal accepted this figure, but increased the moratorium on these retrenchments to three years from the date of the implementation of the Milco SA/Clover transaction.
Milco SA also plans to create 550 new jobs over five years following the implementation of the transaction by expanding Project Masakhane, a Clover project to increase its distribution reach into previously under- and unserved areas, including the increase of Clover’s delivery points at the bottom-end of the market.
The tribunal further ordered that the merged entity not retrench any employee in South Africa as a result of the merger.
It must also contribute reasonable relocation and training costs for the affected employees who successfully apply for a vacant or new position in Project Masakhane; and must offer all affected employees the opportunity to apply for and receive preference in relation to any new or vacant Clover position, including positions created by Project Masakhane.
Meanwhile, to remedy concerns raised by some South African suppliers to Clover of bulk juice concentrate, the merged entity agreed to, for three years from the implementation date of the transaction, continue to procure its required volumes of bulk juice concentrate from local suppliers.
Source: EngineeringNews.co.za; BusinessLive.co.za
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