July 07th 2020
Tongaat Hulett welcomes approval of Starch business acquisition by Barloworld subsidiary.
Agriculture and agri-processing company Tongaat Hulett said today it was pleased at the decision by South Africa’s Competition Tribunal to approve the acquisition of its Tongaat Hulett Starch business by the KLL Group, a wholly owned subsidiary of Barloworld.
It said the decision was the third approval in the jurisdictions relevant to the transaction, with the Botswana Competition Commission and the Common Market for Eastern and
Southern Africa (Comesa) Competition Commission having already approved the transaction without conditions.
The final approval is awaited from the Indonesian Competition Commission, probably in the first week of August.
Tongaat chief executive Gavin Hudson said the approval by the SA Competition Tribunal had been achieved within anticipated timelines, despite the impact on the process of the Covid-19 pandemic.
“This is good news and means we can focus on closing the final conditions relating to the deal,” he said.
“These involve obtaining the consent of our lenders, and the resolution of the MAC (material adverse change) event that Barloworld has called,” he said.
In May, Barloworld indicated it believed a material adverse change had occurred in relation to the sale of the starch business, but on Tuesday Tongaat said it remained “firmly of the view that a MAC has not occurred”. The matter has been referred to an independent third party for determination.
Hudson said the company was still committed to finalising the disposal of the business, one of a range of initiatives Tongaat Hulett has initiated as part of its broader business turnaround process.
“The successful execution of any of these transactions, or a combination of them, will ensure we can deliver on our strategic business partnerships; step-changing our transformation initiatives, protecting employee jobs and helping support the economies of the countries in which we operate,” he said.
Tongaat Hulett Starch is Africa’s largest producer of starch, glucose and related products using maize as its raw material at its five mills.