Conditions set for Ardagh take over of Consol
The South African Competition Commission has recommended the acquisition of Consol by Ardagh, with conditions. Concerns were raised about the effect of the merger on the market for food jars and wide mouth jar.
To remedy this concern, the merging parties agreed to a condition that ensures their continued to supply.
With respect to the public interest concerns, the Commission and the merging parties agreed on the following conditions:
(a) establishing a new Employee Share Ownership Programme which will hold 7% of the shareholding in Consol.
(b) 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;
(c) Ardagh will invest in the construction of a new glass manufacturing facility;
(d) Ardagh shall procure recycled glass or cullet for use in its operations in the ordinary course, and will favour historically disadvantaged persons (HDPs) in such procurement;
(e) Within a specified time frame, Ardagh shall expand Consol’s existing Cullet Owner Driver Scheme;
(f) Ardagh undertakes to support SMME customers through a reduction of minimum order quantities;
(g) Consol shall increase its pre-merger procurement of cullet from small/HDP vendors;
(h) Ardagh undertakes to use reasonable endeavours to introduce new production line of glass related products.
The Commission was of the view that the proposed remedies or conditions adequately address the public interest concerns resulting from the proposed merger.
Image: Cullet procurement is a major condition of the Ardagh purchase of Consol.
