Competition Tribunal finally approves Burger King sale with revised conditions
The Competition Tribunal has finally approved Grand Parade Investments' proposed sale of Burger King .
Grand Parade announced in August that the sale of Burger King SA was back on the cards, after it had been blocked in June.
The company said the parties concerned had reached agreement with the Competition Commission on a revised set of conditions for the proposed deal.
The Competition Commission is very pleased with the outcome achieved on the basis of the revised conditions says the Commission's Principal Legal Counsel, Bakhe Majenge.
The main issue that arose here... is that this [original] merger would have resulted in a situation where the BEE shareholding in Burger King moved from a position of about 68% to virtually nil BEE shareholding.Bakhe Majenge, Principal Legal Counsel - Competition Commission
That raised a very significant concern from a BEE perspective, hence the need for an intervention by the competition authorities to at least secure an alternative commitment from the merging parties which would ensure the empowerment of historically disadvantaged individuals.Bakhe Majenge, Principal Legal Counsel - Competition Commission
Majenge describes the revised conditions as a package of commitments, which include procurement and investment commitments.
It includes a commitment to expand the current number of outlets from about 90 to 150 outlets, which speaks to the investment commitmentBakhe Majenge, Principal Legal Counsel - Competition Commission
[There are] some procurement commitments to empower local suppliers and to create value chain opportunities...Bakhe Majenge, Principal Legal Counsel - Competition Commission
There is also an employee share-ownership programme in terms of which employees will have an effective 5% stake in Burger King...Bakhe Majenge, Principal Legal Counsel - Competition Commission
Majenge says the competition authorities don't see this arrangement as a deterrent to investment in South Africa.
For more detail, listen to the interview below:
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