The ostrich merges. Klein Karoo International and Mosstrich can, finally, merge. The South African Competition Commission (judiciary branch responsible for fair market competition), has granted the right to merge after the two South African players had appealed. The entities were trying to unify the respective divisions specialized in treating material of ostrich origin.
The past “no”
The same South African Competition Commission had not given the merger permission to go ahead this past January. After having listened to the opinion of Klein Karoo and Mosstrich’s competitors, the Commission decided that their operation would have two main consequences. The first: the weakening of the domestic ostrich market. The second: the creation of a monopoly. The two companies, though, had appealed this decision this past July.
Today’s (conditional) “yes”
The go-ahead given by the Commission isn’t without limitation. On the other hand. As reported by howebusinessdaily.com, the Court has placed five specific conditions that the new-born entity will need to respect. The first: at least 40% of ostrich feathers will need to be acquired, for each individual entity, via procurement contract. The second: a certain percentage of meat (which will remain “confidential”) needs to remain inside the internal marketplace. The third: all products (meat and hides) in excess will be offered to laboratories and tanneries of the group in “respect with the fairness, reason, properness of prices, quality and promptness”. The fourth: “The current agreements between Mosstrich and two of its clients, Buffelskom Boerdery e Ostriland will be modified to remain in place indeterminately”. The fifth: the court asks for absolute protection over the jobs at stake.
Read also:
