Competition Commission of South Africa Approved Clover — DFSA Deal

Competition Commission of South Africa Approved Clover — DFSA Deal
Photo: 15.11.2022 271

The Commission has recommended that the Competition Tribunal approve the proposed transaction whereby Clover S.A intends to acquire DFSA, with conditions. 

The primary acquiring firm is Clover S.A. Clover S.A. is controlled by Clover Proprietary Limited (“Clover”), which is ultimately controlled by Central Bottling Company Limited, a company incorporated in Israel. In addition to Clover S.A., Clover controls the following firms: The Real Beverage Company (Pty) Ltd; Clover Milkyway (Pty) Ltd; Clover Pride (Pty) Ltd; Clover Waters (Pty) Ltd; Clover Fonterra Ingredients (Pty) Ltd; and Clover Good Hope (Pty) Ltd. Clover and all its subsidiaries including Clover S.A will collectively be referred to as the “Clover Group.” 

✔️Clover S.A. is a branded consumer goods company active in the food and beverage industry, with subsidiaries in South Africa, Botswana, Namibia, and eSwatini. Its focus is on the manufacturing and supply of dairy products, soy products, olive oil, peanut butter and mayonnaise and the production of nonalcoholic beverages as well as sales, merchandising and distribution of consumer goods. Clover presently operates various manufacturing facilities across Gauteng, the Free State, KwaZulu-Natal, the Eastern Cape and the Western Cape, and has an extensive network of distribution warehouses and fleets throughout South Africa. 

✔️The Milk Procurement Business owned by DFSA is the primary target firm. The Milk Procurement Business does not control any firms. The Milk Procurement Business provides raw milk procurement services to Clover S.A. The Milk Procurement Business procures regular raw milk from milk producers (predominantly located in KwaZulu Natal, Eastern Cape, and the Highveld) which involves, by way of example, (i) buying milk from farmers; (ii) transporting raw milk from farmers to the factories for cooling down (that is, transport and logistics services), (iii) raw milk quality and field services, and (iv) certain administrative, financial and contract management services relating to the collection and supply of regular raw milk procured from producers. 

To address employment concerns related to the transaction, the merging parties have agreed to not effect any retrenchments for a period of three years from the approval date. Clover has also committed to making additional investments in training and skills development as well as enterprise development over a 5-year period post-merger. 

Further, Clover will maintain existing milk procurement contracts with relevant suppliers for a period of five years from the implementation date, provided that the relevant suppliers continue to supply regular raw milk to Clover at market-related prices. Lastly, Clover will make available to its competitors regular raw milk that is surplus to Clover's own requirements at market-related prices.

food markets  South Africa 

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