Milco could appeal Clover conditions
Local dairy products company and consortium seeking to take it over allege that the Competition Tribunal has deviated from their proposed conditions
JSE-listed dairy products producer Clover Industries could appeal against the conditions set by the Competition Tribunal on its merger with Milco consortium, the JSE-listed diary company said on Thursday.
On Wednesday the tribunal approved the takeover of Clover by Milco consortium, which is led by Tel Aviv-based Central Bottling Company (CBC), following a recommendation by the Competition Commission that the R4.8bn transaction be given the nod subject to conditions. The deal will result in the delisting of Clover.
The conditions relate to employment, procurement of juice concentrate from local processors, and information sharing protocol.
Clover said in a statement that with Milco it could appeal against the tribunal’s decision, saying the competition authority had diverted from the conditions the merging parties had proposed.
It said the companies were assessing the impact of the “deviation” by the tribunal from the proposed conditions “and reserve their right to appeal the conditions in due course, but any such appeal will have no impact on the implementation of the Clover scheme”.
In terms of the Competition Act, Milco and Clover can take the matter to the Competition Appeal Court, which has a status similar to that of a high court.
During recent public hearings on the merger, the General Industries Workers’ Union (Giwusa) and Inqubelaphambili Trade Union (ITU) said the tribunal should block the deal as it would result in the loss of 516 jobs.
But the job losses related to Clover’s so-called Project Sencillo, a project that entails the rationalisation of the company’s assets including the consolidation of distribution operations. That project commenced before the transaction.
In its decision, the tribunal said the number of jobs to be lost after the implementation of Project Sencillo would be reduced to 277 from 516 .
Milco and Clover were not available to comment.
The merged entity had offered a two-year moratorium on retrenchments as a result of the completion of Project Sencillo. But the tribunal said it had decided to increase the moratorium from the two years to three years.
The tribunal said the merged entity had also undertaken that in the five years after implementation of Project Sencillo it would create 550 new permanent employment positions at Clover through the expansion of Project Masakhane, to increase its distribution reach into previously disadvantaged areas.
Clover shares were up 1.53% to R23.95 on Thursday.