The sale agreement comes with suspensive conditions such as approval by the shareholder of Dairybelle and the subsequent approval of the transactions by the competition authorities in South Africa.
Real Beverages’ new acquisition will also take effect upon the conclusion of certain ancillary agreements between Dairybelle and Real Beverages relating to arrangements between them after the implementation of the transactions.
“The transactions are in line with the company's stated strategy to expand its portfolio of value added and branded consumer products,” read Real Beverages’ statement in possession of CNBC Africa.
“As announced in March 2014, the company made the decision to enter the attractive high margin yoghurt and custard markets in 2015.”
“The acquisition of the assets comprising the Yoghurt Business will provide the Company with access to the yoghurt market, in which Dairybelle has a meaningful presence.”
(READ MORE: Clover delivers improved results despite rand decline)
Real Beverages says, the location of the new acquisition is also of importance to the company’s long term interests.
“The location of Dairybelle's UHT production facilities in the Western Cape will allow the company, after it acquires the UHT Milk Business, to improve efficiencies through the more effective utilisation of its raw milk supply in the region.”
[DATA CLR:Clover Industries Limited] which owns Real Beverages company is a branded foods and beverages group specialising in the production of dairy products, distribution of chilled and ambient consumer products including sales and merchandising of consumer goods.
The yoghurt business will cost Real Beverages an amount of 125 million rand while, the UHT Milk business will cost the company an amount of 30 million rand.
The company noted that given historical trends, it is unlikely that the combined aggregate purchase price will exceed 400 million rand with current estimates suggesting a purchase price of approximately 200 million rand.
The deal is set to be finalised by 31 July.
BY TRUST MATSILELE