WATCH: Decision on Clover buyout to be handed down today
JOHANNESBURG – The Competition Tribunal will on Monday hand down its decision about the proposed R4.8 billion acquisition of Clover Industries by Israel-based Milco SA.
Milco SA is the consortium led by Tel Aviv-based manufacturer and distributor of soft drinks, dairy products and alcoholic beverages, Central Bottling Company.
In February, the consortium announced that it wanted to acquire the entire issued share capital of Clover for R25 per share.
Clover, the listed branded consumer goods and beverages group, has a market capitalisation of more than R4.3bn, and employs about 9 000 workers.
In July, the Competition Commission recommended to the Competition Tribunal that the proposed large merger be approved with conditions, especially those relating to employment and local procurement.
But the proposed acquisition was met with opposition by labour unions, particularly the Food and Allied Workers’ Union (Fawu) and the General Industry Workers’ Union (Giwusa).
Fawu and Giwusa have 2 600 and 2 000 members at Clover respectively.
The unions submitted objections to the buyout to the competition authorities, raising concerns that workers would be retrenched after the three-year period in which Milco SA will be prohibited from cutting jobs lapses. When the deal was announced, Fawu said Clover was the only locally owned producer out of the four major dairy companies in South Africa, and thus must remain in domestic ownership.
Fawu said more than 7 500 jobs could not be guaranteed should a takeover be allowed as transnational companies believe in a cost-cutting business model.
In its submission to the tribunal, Giwusa also argued the conditions put forward by the Competition Commission were unsatisfactory, and that the acquisition was likely to negatively affect workers.
Milco SA’s 15 percent Black Economic Empowerment partner, Brimstone Investment Corporation, pulled out from the consortium in April following pressure from pro-Palestinian groups.
Pro-Palestinian organisation, Boycott, Divestment and Sanctions, threatened a boycott of Clover products should the transaction with Milco SA go ahead.
The delay in the Competition Tribunal’s decision following the hearing took longer than originally anticipated, forcing Milco SA and Clover to extend the date for fulfilment or waiver from August 23 to September 20.
The companies have said that as soon as they have certainty on the fulfilment of the remaining Clover scheme conditions precedent, they will release a joint finalisation announcement via JSE SENS, setting out the remaining salient dates and times of the scheme’s implementation.
Clover was not immediately available for comment.