Recently, the South African Competition Commission has recommended that the Competition Tribunal approve the proposed acquisition of Consol Glass by Ardagh, with certain conditions.
In November 2021 Ardagh Group announced that it agreed to acquire Consol, the leading producer of glass packaging on the African continent, for an equity value of ZAR 10.1 billion (USD 635 million).
The Competition Commission assessed the proposed transaction on concerns about the effect of the merger on the market for food jars and wide-mouth jars in South Africa.
“To remedy these concerns, the merging parties agreed to a condition that the merged entity will continue to supply food jars or wide mouth jars,” the commission said.
With respect to the public interest concerns, the commission and the merging parties agreed on the following conditions:
- the Merging Parties will establish a new Employee Share Ownership Program which will hold 7 percent of the shareholding in Consol;
- Ardagh will incur all reasonable capital expenditures, including raising necessary debt funding required to finalise the construction of the glass manufacturing facility planned by Consol;
- Ardagh will invest in the construction of a new glass manufacturing facility;
- Ardagh shall procure recycled glass or cullet for use in its operations in the ordinary course, and will favour small vendors in such procurement;
- Within a specified time frame, Ardagh shall expand Consol’s existing Cullet Owner Driver Scheme;
- Ardagh undertakes to support SMME customers through a reduction of minimum order quantities;
- Consol shall increase its pre-merger procurement of cullet from small vendors;
- Ardagh undertakes to use reasonable endeavours to introduce a new production line of glass-related products.