Ardagh Group’s acquisition of South Africa’s Consol Glass has been approved by regulatory authority, with conditions.
The South African Competition Commission recommended the Competition Tribunal approve the transaction whereby Luxembourg-based Ardagh Group can acquire glass manufacturer Consol, with conditions.
The commission said: “The Commission found that the proposed transaction raises significant public interest concerns.
"In addition, the Commission was concerned 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 merged entity will continue to supply Food Jars or wide mouth jars.”
In addition the commission and the merging parties agreed that the merging parties will establish a new employee share ownership programme, which will hold a 7% shareholding in Consol.
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, and Ardagh will invest in the construction of a new glass manufacturing facility.
Further, Ardagh committed to procuring recycled glass, or cullet, for use in its operations in the ordinary course, and will favour historically disadvantaged persons in such procurement.
Additionally, within a specified time frame, Ardagh shall expand Consol’s existing cullet owner-driver scheme and support small, medium-sized and microenterprise customers through a reduction of minimum order quantities.
“Consol shall also increase its pre-merger procurement of cullet from small or historically disadvantaged person vendors. Ardagh undertakes to use reasonable endeavours to introduce a new production line of glass-related products.
“The commission is of the view that the proposed remedies or conditions adequately address the public interest concerns resulting from the proposed merger.”
Ardagh announced in November it planned to buy Consol for ZAR10.1 billion ($635 million).
Headquartered in Johannesburg and founded in 1946, Consol operates four glass production facilities.
It serves international, regional and domestic customers, principally in the beer, wine, spirits, food and non-alcoholic beverage sectors.
In the year to June 30, 2021, Consol reported consolidated revenues of ZAR9.0 billion ($566 million).