South Africa’s antitrust commission moved to revoke the approval of a merger between two of the nation’s biggest packaged-food producers. The Competition Commission filed an application with the Competition Tribunal on Tuesday, seeking the revocation of the latter panel’s conditional consent for Premier Group Ltd.’s acquisition of smaller rival RFG Holdings Ltd. in March. Premier denied any wrongdoing.
The commission stated this is the first time it has applied for a revocation since South Africa overhauled its antitrust law in 2019. Under local legislation, the commission probes competition and public-interest effects of mergers and can decide on small and intermediate ones. In the case of large transactions, it investigates and makes recommendations to the tribunal.
In July, Premier informed the commission that it intended to close RFG’s fruit-canning facility in Tulbagh in the Western Cape province, one of two such plants in the country. The factory provides a route to market for about 200 farmers in the region, employs more than 400 people on permanent and fixed terms, and affects thousands of seasonal workers across the broader agricultural value chain. Premier and RFG “failed to disclose information about the contemplated closure to the commission and the tribunal, despite the parties having known of and discussed the option to do so before the tribunal approved the merger,” the commission said.
The non-disclosure denied the parties “an opportunity to assess and address the closure’s competition and public-interest implications before approving” it. Premier rejected any suggestion it acted unlawfully or withheld material information. The company entered into voluntary severance pacts with the overwhelming majority of affected employees under section 189 of the Labor Relations Act.
Complaints from parties including the South African Clothing and Textile Workers Union about the closure alerted the commission to the breach. The companies first announced the deal in October last year, with the transaction valuing RFG at about 5.78 billion rand ($347 million) at the time.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing