Clover 's chief executive Johann Vorster said the partnership, called Clover Waters, "is in line with our strategy to expand Clover's portfolio of value added and branded beverages products". As a result of the transactions, Clover Waters would obtain the right to manufacture, distribute, market and sell bottled mineral water under Nestlé's Pure Life, Valvita and Schoonspruit brands as well as ice tea under the Nestea brand.
"These brands will complement Clover SA's Aquartz bottled water and Manhattan ice tea brands, which will also be manufactured, distributed, marketed and sold by Clover Waters," Clover said.
"Clover and Nestlé believe that the transaction will unlock growth and shareholder value by providing a broader platform to grow their position in the supply of bottled mineral water and ice tea. The synergies will result in greater efficiencies and a more effective use of resources."
The R58m transaction, subject to the fulfilment of various conditions including Competition Commission approval, would be settled through the issue of 30% of the shares in Clover Waters to Nestlé. After the transaction, Clover SA would hold 70% of Clover Waters and Nestlé 30%.
Vorster said the combined entity would provide Clover "with great opportunities across a broader range of complementary products".
"In addition, it also allows us to realise significant economies of scale by combining operations and leveraging off Clover's extensive distribution network to further entrench the water and ice tea brands nationally. For a local African company such as Clover to be entrusted with global brands such as Pure Life and Nestea is an accolade that makes us very proud."
Sullivan O'Carroll, chairman and managing director of Nestlé SA, said: "We continuously seek opportunities to improve our efficiencies and brand presence. This partnership is aligned to our business objectives and will allow consumers better access to our products."
Clover reported last month that it expected headline earnings per share for the six months to December to be between 29% and 34% lower than the prior period, as it was hurt by industrial action, fuel price hikes and the under-supply of ultra-high temperature processing milk.
Source: Business Day via I-Net Bridge
For more than two decades, I-Net Bridge has been one of South Africa’s preferred electronic providers of innovative solutions, data of the highest calibre, reliable platforms and excellent supporting systems. Our products include workstations, web applications and data feeds packaged with in-depth news and powerful analytical tools empowering clients to make meaningful decisions.
We pride ourselves on our wide variety of in-house skills, encompassing multiple platforms and applications. These skills enable us to not only function as a first class facility, but also design, implement and support all our client needs at a level that confirms I-Net Bridge a leader in its field.
Go to: http://www.inet.co.za
