The local competition authority in South Africa has recommended Coca-Cola HBC’s planned takeover of Coca-Cola Beverages Africa be approved.
UK-listed Coca-Cola HBC struck a deal in October to buy a combined 75% of Coca-Cola Beverages Africa (CCBA) from The Coca-Cola Company and Gutsche Family Investments for $2.6bn.
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In a statement yesterday (13 July), the Competition Commission of South Africa (CCSA) said it has recommended that the country’s Competition Tribunal approves the proposed transaction.
“The Commission is of the view that the proposed transaction is unlikely to substantially lessen or prevent competition in any market”, the CCSA said.
Due “to public interest aspects” of the proposed deal, both parties have agreed to conditions, including to not make any jobs redundant in South Africa following the combination of the two companies “for a moratorium period”, the CCSA added.
A spokesperson for the watchdog refused to be drawn on how long this moratorium period would last, when asked by Just Drinks. “This information has been claimed confidential at this stage,” he said.
Both companies have also made a pledge “to investing in developing the downstream distribution and retail aspects of its South African business”, the CCSA said.
They have also committed pursuing a secondary inward listing of Coca-Cola HBC on the Johannesburg Stock Exchange. The CCSA spokesperson said a time period for the move has been set, though this was also “confidential”.
The deal still needs to be approved by Competition Tribunal. Large mergers typically face a hearing after the CCSA’s referral, the spokesperson said. A decision then follows.
Coca-Cola HBC said in October the acquisition would “materially expand” its presence in Africa, seeing the business enter 14 more markets in the continent, such as South Africa, Ethiopia and Kenya.
