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Clover receives R4.8bn buyout offer from Milco consortium

Clover has received a buyout offer from the newly-formed consortium called Milco - led by Israel-based Central Bottling Co.- which has plans to delist the dairy business from the JSE and expand it across sub-Saharan Africa. MilCo will make a cash offer to acquire all the issued shares of Clover for R25.00 per share, valuing the company at R4.8billion.

©nizas via 123RF
MilCo is a consortium of operators and investors, with international and regional expertise in the dairy, juice and beverage industries on the global scale. In addition to local representation through Brimstone Investment Corporation (Brimstone) and Clover management, the consortium comprises International Beer Breweries Limited, Incubev Limited, and Ploughshare Investments Limited.

The total value of the transaction is R4.8billion with R3.8billion of foreign direct investment provided by the consortium’s international partners. The transaction remains subject to a number of conditions including certain regulatory approvals and Clover shareholder approval. In the event of approval, Brimstone will own an effective 15% of Clover.

Brimstone participation

Brimstone announced its participation in the bid today, cementing its plans to further expand into the food sector.

“In addition to a long history of being one of South Africa’s most popular brands, Clover runs South Africa’s largest chilled and frozen goods distribution network and is well placed for further expansion. This made it an attractive investment proposition for the foreign direct investment which South Africa desperately needs if we wish to achieve the economic freedom our country deserves,” says Brimstone CEO Mustaq Brey.

Brey adds that all of Brimstone’s investments are geared towards transforming the country's economy by creating shareholder value on a sustainable and responsible basis. “In this transaction, MilCo is adopting an owner-operator approach and a long term investment horizon with a view to grow the dairy category as a whole, thereby benefiting local farmers and other suppliers throughout the value chain. In addition to creating 100 new permanent job opportunities and skills development for our employees, MilCo is committed to double the number of informal retailers that Clover serves to 60,000 over the medium term.”

“The combination of our international partners’ beverage industry expertise with Clover managements’ local knowledge of the business landscape will support sustainable growth as we look for new export opportunities and expand into select sub-Saharan territories in the future,” says Brey.

“Food has always been a strategic sector for Brimstone and just last week we announced our bid to acquire a further 5.9 % stake in the Oceana Group. Both of these are fairly significant deals which clearly illustrate our growing investment focus on transforming South Africa’s food sector while creating and unlocking value for our shareholders. Post the successful implementation of the Clover transaction and its proposed delisting, investors seeking exposure to Clover will be able to do so via Brimstone,” concludes Brey.
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