FIN24 / 11 FEBRUARY 2020 - 17:31 / STAFF REPORTER
The Competition Commission has recommended that the Competition Tribunal give the green light to a R24bn transaction that will see PepsiCo take over Pioneer Foods, the Commission said in a statement on Monday.
The deal's benefits are "significant", the Commission said, while recommending that it be approved subject to conditions including job creation, local investment and a minimum R1.6 billion B-BBEE transaction.
In 2019, New York-headquartered PepsiCo offered R110 per share – a premium of around 56% - to acquire Pioneer Foods, which manufactures brands including Weet-Bix, Sasko, Pro-Nutro and Spekko rice.
Global giant PepsiCo consists of six divisions which manufacture and distribute snacks and beverages that are already available in South Africa including Simba, Nik Naks, Lays, Doritos and Pepsi soft drinks.
According to the Commission, the proposed deal will result in "significant public interest benefit for South Africa", and is unlikely to result in a substantial prevention of lessening of competition in any relevant markets.
It recommended that the Tribunal approve the merger, subject to several public interest commitments including a moratorium on retrenchments for a certain period, as well as the creation of jobs at the merged entity.
Further recommended conditions include a significant investment in the operations of the merged entity, the agricultural sector and the establishment of an enterprise development fund; as well as a B-BBEE transaction to the value of at least R1.6 billion that will promote a greater spread of ownership and participation by workers and historically disadvantaged South Africans.
* Compiled by Marelise van der Merwe
LINK : https://m.fin24.com/Companies/Retail/competition-commission-gives-the-nod-to-pepsico-takeover-of-pioneer-foods-20200211
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