CompCom greenlights Ardagh’s acquisition of Consol

With employee empowerment conditions.
Image: Shutterstock

The Competition Commission (CompCom) has recommended that the Competition Tribunal approve Ardagh Group S.A’s acquisition of glass packaging manufacturer and supplier Consol.

The merger was first announced in November 2021. At the time, Ardagh said it would pay R10.1 billion for Consol, and finance the acquisition through a combination of its cash resources, as well as by assuming Consol’s existing debt of R5.7 billion.

Read: Ardagh to buy African bottle maker Consol for R10.1 billion

However, the commission noted that the merger of Ardagh – a private glass and metal packaging manufacturing company registered in Luxembourg – and Consol raised significant public interest concerns.

Thus, the nod from the commission came with several conditions, including some aimed at empowering Consol employees and protecting the market for food jars and wide mouth jars – the latter is typically used as packaging for food items like pickles, beetroot and whole fruits.

To address the commission’s concerns around protecting the above mentioned markets, Ardagh and Consol have been tasked with continuing to supply these jar types.

Apart from having to invest in the construction of a new glass manufacturing facility, Ardagh and Consol will also have to establish a new employee share ownership programme which will have a 7% shareholding in Consol.

Another employee-focused condition stipulates that Ardagh must – within a specified time – expand Consol’s existing Cullet Owner Driver Scheme.

Further conditions dictating the success of the merger include:

  • Ardagh will incur all reasonable capital expenditure, including raising necessary debt funding required to finalise the construction of the glass manufacturing facility planned by Consol.
  • Ardagh shall procure recycled glass or cullet for use in its operations in the ordinary course and will favour historically disadvantaged persons (HDPs).
  • Ardagh undertakes to support small, medium and micro enterprise customers through a reduction of minimum order quantities.
  • Consol shall increase its pre-merger procurement of cullet from small/HDP vendors.
  • Ardagh undertakes to use reasonable endeavours to introduce a new production line of glass-related products.

AUTHOR PROFILE

COMMENTS   1

You must be signed in and an Insider Gold subscriber to comment.

SUBSCRIBE NOW SIGN IN

Praise be to Big Chief OSUC* for graciously allowing an alien to purchase another floundering SA company. Of course, if the Chief and all his commie comrades simply disappeared tomorrow, there would be no need for SA companies to flounder and go bust in the first place.
And pretty soon the aliens are going to start pushing back against all the irrational conditions inevitably attached to the Chief and his CompCom’s approval – did I mention – gracious as it may be.
*Open Sandal, Uncooked Chicken

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Podcasts

Instrument Details  

You do not have any portfolios, please create one here.
You do not have an alert portfolio, please create one here.
INSIDER SUBSCRIPTION APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING

Follow us: