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South Africa’s competition tribunal approves Coca-Cola-SABMiller bottling operations merger

DBR Staff Writer Published 12 May 2016

Coca-Cola and SABMiller South African bottling operations merger deal has won the approval of South African Competition Tribunal, leading to the formation of an entity which is touted to be Africa’s largest soft-drink beverage operation.

coke-sabmiller

The companies involved in the merger deal Coca-Cola Beverages Africa (CCBA), SABMiller, The Coca-Cola Company, and Gutsche Family Investments, hailed the decision.

The parties said that the merger would provide support to the business functions in the broader South African political and social context.

The approval from the tribunal comes after the involved parties signed an agreement with the South African government, making commitments to help in the economic and social development of the country.

The commitments pertain to employment, access to retail cooler space for smaller competitors, localisation of production and inputs used in the Coca-Cola products and Appletiser brands, empowering local people economically and location of its headquarters and tax residency in South Africa.

Both the companies have made a commitment to ensure that the merged entity maintains its total permanent employment at current levels for a period of three years from the date of approval of the deal.

Besides, the companies said that there would no involuntary retrenchments of employees in the bargaining unit. They have also made it clear that retrenchments of non-bargaining unit skilled staff would be limited.

The companies agreed to invest ZAR800m ($53.8m) in enterprise development of the two companies.

SABMiller and Coca-Cola also made a commitment to create a ZAR400m ($26.9m) fund for enterprise development in the agriculture value chain to support developing farmers and small suppliers.

An incremental investment of ZAR400m ($26.9m) to develop downstream distribution and retail capacities and skills development and training is another commitment made by the companies to allay fears over the merger.

SABMiller CEO Alan Clark said: "The creation of Coca-Cola Beverages Africa is more than the creation of a company with common interests and a long term growth plan: the merger is set to deliver demonstrable benefits to South Africa by way of significant inward investment and additional tax revenues, job creation and a number of specific benefits that address the national imperatives of SMME creation, local procurement, transformation, and growth in the agricultural sector."


Image: SABMiller-Coca Cola gain Tribunal nod to merge bottling operations. Photo: Courtesy of tiverylucky/FreeDigitalPhotos.net.