LETTER: Make sure takeovers benefit everyone
PepsiCo, which is to buy Pioneer, will invest R6.5bn as part of a social compact between the government and the merging companies
Recent media reports on the R26bn acquisition of Pioneer Foods by US snack and beverage giant PepsiCo have shown that the government is serious about safeguarding the interest of the public, business and workers against the pursuit of the bottom line by multinational companies. Under the Competition Act, the trade & industry minister is empowered to flex his muscles to ensure that everyone benefits.
Section 12A (3) of the Competition Act gives the minister leverage in determining whether foreign multinational companies are in agreement with public interest commitments. Mergers must promote local small businesses, farmers and local procurement as well as maintain jobs. As part of this social compact between the government and merging companies, PepsiCo agreed to invest R6.5bn, which includes R1.6bn for a worker trust fund that will be used to buy shares in the Nasdaq-listed company. Half of the dividends will be paid out to workers and the other half retained to fund the tr...
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