More than 100 jobs to be created through maize milling merger conditionally approved by the Competition

A total of 101 additional jobs will be created following the Competition Tribunal’s conditional approval of a merger involving maize milling firm, Blinkwater Meule (Pty) Ltd (“Blinkwater”). Farmers classified as historically disadvantaged persons (“HDPs”) and local communities will also benefit through procurement conditions imposed on the merger.

In terms of the proposed transaction, Metier Capital Growth Fund III GP (Pty) Ltd, in its capacity as Ultimate General Partner of Metier Capital Growth Fund III Partnership (the acquiring group), intends to acquire a certain percentage of the issued share capital in Blinkwater.

The Tribunal found that the proposed merger does not raise any competition concerns.

In respect of public interest considerations, the merging parties tendered certain conditions and after further engagements with the merging parties, the Tribunal approved the proposed transaction subject to the public interest related conditions as set out below:

Job creation

The merging parties will ensure that a total of 101 jobs are created following the merger’s approval. The jobs will be created through capital expenditure projects (“CAPEX projects”) which include: (i) expanding an existing Blinkwater milling facility in Stoffberg, in Mpumalanga; (ii) recommissioning an inactive mill in Mbombela, in Mpumalanga; and (iii) commissioning a 1MW solar plant at the Stoffberg mill.

In terms of the merger conditions, the merging parties will:

• create 20 new jobs at the expanded, recommissioned and newly commissioned milling facilities by 31 December 2026;
• establish 50 new Spaza Shop Depots by 31 December 2028 which, in turn, will create 50 new jobs at the Spaza Shop Depots by 31 December 2028; and
• create 31 new jobs elsewhere in the distribution network owned by Blinkwater by 31 December 2028.

The Spaza Shop Depots refer to the distribution network consisting of convenience businesses, and maize delivery and collection points established and owned by Blinkwater and operated in underserviced and informal areas by members of the local community.

Procurement

• Maize from HDP farmers – after the transaction’s implementation, the merged entity shall continue to use the Spaza Shop Depots to procure maize from HDP farmers;
• Spaza shops – Blinkwater generally leases the property on which its spaza shops are located from members of the local community. After the transaction’s implementation, the merged entity shall continue to lease property from local community members and will increase the number of leases by 50, by 31 December 2028; and
• Solar plant - the merged entity shall use HDP firms for the commissioning of the solar plant included in the CAPEX Projects, and will continue to use HDP firms for its solar installations and maintenance services for three years after the transaction’s implementation. The merged entity has committed a specified minimum amount in this regard.

Blinkwater is an integrated maize milling business that produces maize meal and hominy chop. It distributes its maize meal at retail level through spaza shops, independent wholesalers and retailers. It also supplies small amounts of rice, flour and sugar at its spaza shops. Blinkwater conducts its business activities throughout South Africa, particularly in the Mpumalanga and Limpopo provinces.

The acquiring group is a growth capital private equity investor managing third-party capital from various investors.

Issued by:

Gillian de Gouveia, Communications Manager

On behalf of the Competition Tribunal of South Africa

Cell: +27 (0) 82 410 1195

E-Mail: GillianD@comptrib.co.za

Twitter: @comptrib