By Tauhierah Salie

Concerns have been raised by Boycott Divestment Sanction South Africa after Clover received a buyout offer of R4.8 billion from newly formed company Milco, of which 60% is owned by Israel’s Central Bottling Company (CBC).

Clover said in a statement on Monday that CBC has plans to expand the dairy business across sub-Saharan Africa and offered R25 a share for the Johannesburg-based producer, compared with a Friday closing price of R20.

MilCo is a group of operators and investors, with international and regional expertise in the dairy, juice and beverage industries. It is comprised of South African investment firm Brimstone and Clover management, International Beer Breweries Limited, Incubev Limited, and Ploughshare Investments Limited.
The total value of the transaction is R4.8bn with R3.8bn of foreign direct investment provided by the consortium’s international partners.

The transaction remains subject to a range of conditions which includes regulatory approvals and Clover shareholder approval. In the event of approval, Brimstone will own an effective 15% of Clover.

In keeping with President Cyril Ramaphosa’s hopes to improve the country’s economic standing through foreign investment, Brimstone CEO Mustaq Brey said it is a good opportunity.

“In addition to a long history of being one of South Africa’s most popular brands, Clover runs South Africa’s largest chilled and frozen goods distribution network and is well placed for further expansion. This made it an attractive investment proposition for the foreign direct investment which South Africa desperately needs if we wish to achieve the economic freedom our country deserves.”

Brey highlighted that partnering of local with international entities will help support sustainable growth as the company seeks new export opportunities and hopes to expand into select sub-Saharan territories in the future.

“Food has always been a strategic sector for Brimstone and just last week we announced our bid to acquire a further 5.9 % stake in the Oceana Group. Both of these are fairly significant deals which clearly illustrate our growing investment focus on transforming South Africa’s food sector while creating and unlocking value for our shareholders. Post the successful implementation of the Clover transaction and its proposed delisting, investors seeking exposure to Clover will be able to do so via Brimstone,” said Brey.

In a statement released on Wednesday, the Media Review Network (MRN) called on executives and shareholders of the dairy and drinks producer to reconsider their intentions of the sale. It added that the economic, social and cultural isolation of Israel, should be viewed as a non-violent method to pressure the country to end its violations of international law and to respect Palestinians human rights.

MRN further highlighted that Clover “should not be seen as working against efforts by international institutions to hold Israel accountable for serious crimes against humanity and war crimes.”

BDS SA spokesperson Tisetso Magama explained that CBC has donated large sums of money (such as R150 000 at one point) to a far-right group which runs supportive campaigns of Israel and its defence force.
Magama said if the deal goes through, a boycott of all Clover products will take place.

“BDS will either initiate, support or join a forceful but yet peaceful campaign against the buyout of this Israeli company.”

He added that a meeting will be arranged with Brimstone for clarity and that the deal will be investigated.

VOC