Merger approved: HoldCo and Agrifin HoldCo to acquire BKB Limited and VKB Landbou

The Competition Tribunal has approved, subject to conditions, the merger whereby Trade Retail HoldCo and AgriFin HoldCo (the acquiring firms) will acquire control over the trade retail, fuel and financial services businesses of BKB Limited (“BKB”) and VKB Landbou (Pty) Ltd (“VKB”) (the target businesses).

The Tribunal said a merger involving agricultural products and fuel retail has been approved with condition that it promotes greater spread of ownership among historically disadvantaged individuals and also to address information exchange concerns.

The acquiring firms are newly incorporated private companies established by BKB and VKB for the purpose of the proposed transaction. The target businesses are active in (i) the retail trade of agricultural products, (ii) the retail trade of fuel, and (iii) the provision of financial services in the agricultural sector.

Gillian de Gouveia, Competition Tribunal of South Africa Communications Officer said that the Tribunal imposed a condition that involves the implementation of a transformation initiative whereby a certain percentage of shares will be held by historically disadvantaged individuals (HDIs).

“This involves a commitment by BKB to restructure BKB Fuel Retail SubCo so that no less than 25% of its shares are held, directly or indirectly, by one or more HDI shareholders. BKB is required to implement this transformation initiative within 24 months of the merger implementation date,” said De Gouvela.

The imposed conditions aimed at preventing post transaction information sharing include that for as long as BKB and VKB can appoint or nominate individuals to the board of directors of the acquiring firms they shall ensure that their nominees who are also employed by or serve on, or are nominated and/or appointed on any board or management committees of the holding companies and/or affiliate companies of BKB and VKB that are active in grain and oilseed storage and trading activities are not directly involved in the day-to day management of the grain and oilseed storage and trading activities (as defined in the conditions).

Furthermore, no competitively sensitive information in relation to the grain and oilseed storage and trading activities shall be discussed, disclosed nor shared in any form or means by the boards of directors of the acquiring firms.

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