“The Competition Tribunal issued its confidential reasons for approving the merger between BB Investment Company (Pty) Ltd and Adcock Ingram Holdings (Pty) Ltd on condition that Adcock will not retrench any employees for one year from the day the deal is approved,” the Competition Tribunal said in a statement.
[DATA AIP:Adcock Ingram] is a healthcare and pharmaceutical company headquartered in South Africa.
In June this year, the Competition Commission stalled the Adcock Ingram and BB Investment Company deal in order for the body to first assess the public interest factors, the effects of the transaction and the competition effects.
(READ MORE: Competition Commission stalls Adcock-Bidvest deal)
BB Investment Company is a wholly owned subsidiary of Bidvest Group Ltd, also known as Bidvest.
“The Tribunal’s reasons follow a one-day hearing on 6 August 2014. There were no competition concerns arising from the merger but the deal raised employment concerns which came about as a result of Adcock embarking on a restructuring exercise. In this exercise, Adcock identified a total number of 51 positions as being redundant,” the Competition Tribunal explained.
The Tribunal’s reasons, according to the statement, explained that during the process of the merger, the Competition Commission referred the merger to the Tribunal on the basis that Adcock would follow a fair process of identifying the redundancies, and that a moratorium on the retrenchments was therefore not needed.
Thereafter, Bidvest confirmed that it would implement a turnaround strategy once the merger was complete, which could introduce further retrenchments over and above the 51 positions in question.
The Commission therefore saw the need implement safeguards on the employment after the merger, and recommended that the Tribunal approve the merger on condition that it would limit the number of Adcock retrenchments to only the 51 identified employees.
(READ MORE: Bidvest & PIC bully Adcock’s board)
The Commission also recommended that a moratorium be imposed on retrenchments specific to mergers for a three-year period.
“After considering submissions from both the Commission and the merging parties, and hearing evidence from Kevin Wakeford the newly appointed chief executive officer of Adcock, the Tribunal decided to approve the proposed transaction subject to the condition that Adcock will not retrench any employees for a period of one year from date of approval of this transaction,” the Tribunal said.