Clover and Milco hearings continue

By Jim Cornall contact

- Last updated on GMT

Milco SA plans to delist the company from the Johannesburg Stock Exchange (JSE) if the deal is approved.
Milco SA plans to delist the company from the Johannesburg Stock Exchange (JSE) if the deal is approved.
The hearing into the proposed merger transaction, whereby Milco SA (Pty) Ltd (Milco) seeks to acquire Clover Industries Ltd (Clover), resumed on Monday, September 9, 2019, South Africa’s Competition Tribunal says.

The tribunal has requested further submissions before it issues a decision.

Milco is a newly-formed consortium established for the purpose of this transaction. Clover has been operating since 1898 in the dairy and fast-moving goods industries.

South Africa’s Competition Commission, which assesses large mergers before referring them to the tribunal for a decision, recommended the proposed transaction be approved with conditions.

The conditions relate to concerns over possible merger related retrenchments as well as the potential exchange of competitively sensitive information. The conditions also address concerns by two juice concentrate suppliers that they may lose Clover as a customer after the merger and suffer revenue losses.

Earlier during the hearing, two trade unions addressed the tribunal in relation to concerns over job losses.

The deal is being pursued by Milco SA Proprietary Limited, which plans to delist the company from the Johannesburg Stock Exchange (JSE).

Milco SA consists of Israel’s Central Bottling Company (CBC), together with several smaller partners, whose takeover of Clover will cost R4.8bn ($345m). The deal was announced in February. If it proceeds, Israel’s CBC will take control of 59.5% of the South African milk and dairy company.

CBC is Israel's leading manufacturer and distributor of beverages, and, through its foreign subsidiaries, has manufacturing and distribution operations in Turkey, Romania, and Uzbekistan.

Milco SA plans to delist the company from the Johannesburg Stock Exchange (JSE).

However, there is opposition to the move. In April, the human rights and Palestine solidarity organization BDS South Africa welcomed the announcement by the South African firm, Brimstone Investment Corporation​, to exit the take-over.

Brimstone would have held 15% of the shares.

In spite of Brimstone’s withdrawal, BDS South Africa says if the Israeli take-over proceeds, it will actively support or initiate the call for direct action and a militant but peaceful campaign, including protests and disruptions against Clover and a boycott of all its products.

It said it would work with other groups opposed to the deal, including COSATU (Congress of South African Trade Unions), FAWU (Food and Allied Workers Union), Popcru (Police and Prisons Civil Rights Union), the ANC Youth League, several Palestine solidarity organizations and others.

The hearing takes place at the tribunal court room, Mulayo Building, in Sunnyside, Pretoria.

Related topics: Regulation & Safety, Consolidation

Related news

Follow us

Products

View more

Webinars