Shoprite/Metcash deal approved with conditions
The Competition Tribunal on Monday, 1 August 2011, approved with conditions the transaction in which Shoprite Checkers, a wholly owned subsidiary of Shoprite Holdings (SHP), intends to acquire the entire shareholding in Metcash Seven Eleven as well as a part of the Friendly Distribution Division of Metcash Trading Africa.
Earlier, the Competition Commission assessed the merger and recommended that the Tribunal approve it on condition that Metcash find alternative employment for the employees who stand to be retrenched after the merger, as a result of internal restructuring in Metcash, and to do the same for employees who have applied for voluntary retrenchment, unless Metcash accepts their applications.
According to the merging parties the proposed merger is mutually beneficial in that Shoprite, through its OK Franchise Division, will expand its business operations by entering into more franchise arrangements and will benefit from the economies of scale this opportunity presents. Metcash Trading Africa is selling its interest as part of a group restructuring plan.
The Shoprite group of companies mainly comprises various supermarkets and stores including Shoprite, Shoprite Usave, Checkers, Checkers Hyper, OK Power Express, House and Home, Hungry Lion and the OK Franchise Division. These stores retail a wide range of fast moving consumer goods (FMCG) such as food, home ware, clothing, cellular telephone products and a number of value added retail services.
Metcash Seven Eleven is a franchisor of the Seven Eleven and the Friendly Seven Eleven franchise stores. Friendly Distribution, which falls within Metcash Trading Africa, consists of various large distribution centres located throughout South Africa to provide support to the franchise stores within the group.
Source: I-Net Bridge
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