Tribunal approves Milco SA’s acquisition of Clover subject to no retrenchments
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The deal, first announced in February, will see a consortium led by Tel Aviv-based Central Bottling Company acquire all the shares of Clover for R25 each.
Wednesday’s conditional approval saw Clover’s share price rise 4.1 percent to R23.44 on the JSE in afternoon trade, and its shares closed 4.75 percent higher at R23.59 on the JSE.
The tribunal said that it initially had concerns 516 workers would be retrenched from Project Sencillo, a Clover project to better utilise its factories, production lines, warehouses and trucks. But the parties had offered to not retrench any employees as a result of the completion of Project Sencillo for two years from the date of takeover.
The Competition Commission had initially concluded that the planned retrenchments were substantial and merger specific, but the parties had argued that the retrenchments were operational and unrelated to the proposed transaction.
The commission had recommended approval of the transaction, subject to the two-year moratorium, given that the merged entity would also create jobs.
The 550 jobs to be created at Clover would be through the expansion of Project Masakhane, a Clover project to increase its distribution reach into previously under- and unserved areas, including the increase of delivery points at the bottom-end of the market.
These new positions would consist mostly of sales representatives, drivers and van assistants, the tribunal said.
Also, the original number of jobs potentially lost in Project Sencillo was reduced to 277.
The merged entity would not be allowed to retrench employees in South Africa as a result of the merger, excluding the conditions imposed on Project Sencillo. In addition, Clover would have to continue to procure its required volumes of bulk juice concentrate from local suppliers.
The General Industries Workers Union of South Africa had alleged that Central Bottling Company had violated international law by operating in illegally occupied Palestinian territories, but the tribunal argued that these concerns fell outside its jurisdiction.