Acquisition of Clover by consortium faces delays

Clover says the deal will no longer be finalised on May 3, 2019.

The acquisition of South Africa’s biggest dairy producer Clover Industries by a consortium called Milco has been delayed and will no longer be finalised on May 3, 2019.

In an update to shareholders, Clover said a new finalisation date will be released once the deal meets various conditions including the approval from competition authorities.

The deal between Clover and the Milco was initially announced in February 2019, wherein a consortium led by Israel-based Central Bottling Company offered to buy 59.5 percent of Clover. The remainder of the shareholding would be held by investment holding company Brimstone Investment Corporation (15 percent) and executive management of Clover (6.3 percent).

However, Brimstone caved in to pressure from a pro-Palestine activist group Boycott Divestment Sanctions South Africa, as it announced this month that it will no longer be participating in the deal.

Brimstone is currently in negotiations with a potential replacement black economic empowerment investor to take up its 15 percent in the consortium.

Brimstone may still hold a stake in Clover but it was negotiating with Nigeria-based International Beer Breweries Limited (IBBL) over a “back-stop” agreement as it seeks a replacement empowerment partner. Under the terms of the proposed agreement, IBBL would acquire Brimstone’s stake on December 31, 2019, should Brimstone not find someone else to acquire it.