21 Sep 16 Not lovin’ it: Ramaphosa to sell off McDonald’s SA
Deputy President Cyril Ramaphosa is poised to sell fast-food company McDonald’s SA to MSA Holdings, a McDonald’s subsidiary operating in the Middle East.
McDonald’s SA CE Greg Solomon has confirmed the proposed transaction that came to light prematurely on Tuesday when it emerged in a radio interview with that the Competition Commission that it had given its approval to the transaction two weeks ago.
Solomon was reluctant to say anything further than what was contained in a measured holding statement as the transaction was still being negotiated.
“McDonald’s SA can confirm that there is a process under way to find a suitable replacement for Mr Ramaphosa, the current McDonald’s Developmental Licensee for SA.
“The potential purchaser, MSA Holdings, is a company based in the United Arab Emirates,” the statement says. The move was “in line with the public statement by Mr Ramaphosa on his election to the position of ANC deputy president in December 2012 that he would undertake a review of his business interests”.
Solomon said the proposed transaction had been approved recently by the Competition Commission. “All parties to the transaction and their professional advisers have signed extensive confidentiality agreements regarding the proposed transaction and no further comments can be provided at this stage.”
Commission spokesman Itumeleng Lesofe said the body had been notified about the transaction on June 9 and approved it on September 5.
“The commission’s assessment found that the merger is unlikely to substantially prevent or lessen competition in the provision of quick-service restaurants in that the acquiring group is not active in SA. Thus, there is no geographic overlap between the activities of the merging parties,” he said.
MSA operates McDonald’s franchises throughout the Middle East.
The commission said it could not disclose the value of the transaction. Ramaphosa’s office said that he would not be commenting and referred all queries to Solomon.
After being elected deputy president in 2014, Ramaphosa disposed of all his commercial interests that could pose a conflict of interest with his position in the government, retaining only McDonald’s, his game farm and 32 residential properties.
This entailed his complete divestment from the holding company Shanduka, which he founded and which included a range of regulated assets in mining, telecommunications, industrials and financial services. Shanduka was valued at the time at R8.8bn, of which Ramaphosa’s family trust owned an estimated R2.6bn.
The proceeds were invested in a blind trust, in which Ramaphosa has no knowledge of the investments made.
McDonald’s SA has a 20-year agreement to run more than 200 restaurants in SA. According to the company it serves more than 8-million customers each month and employs more than 10,000 people.
Source: BDLive.co.za, EWN.co.za