Pioneer Foods given green light on acquisition, with conditions

The Bokomo breakfast cereal maker announced in November it was in negotiations with Heinz SA to acquire the remaining 50.1% stake in Heinz Foods SA​​ from US good giant Kraft Heinz.

This would give Pioneer full ownership of the venture that was set up between Heinz and Pioneer in 2003.

However, South Africa's Competition Commission has voiced concern the deal could have a negative effect on its current workforce and has imposed a number of condition s in terminating employees.

Fair deal for employees

It ruled that the merging parties may not “retrench” any unskilled employees or employees with a qualification Grade 12 within two years of the merger being implemented.

It also imposed the condition that layoffs should not exceed 27, while those employees that are retrench should be given preference for any suitable positions that arise in the 12 months after such an outcome.

The Commission’s ruling comes as Pioneer – which sells a number of well-known brands including Sasko bread, Bokomo Weet-Bix and Mama’s pies and pastries – posted a 44% increase in its half-year operating profit.

The company reported operating profit for the six months ended March 31 of between R922m ($77.37m) and R991m ($79.02m) versus R688m ($55.49m) a year earlier.

Group turnover fell by 2.8% to R9.9bn ($798m), largely due to sales price deflation in soft commodities.