SOUTH AFRICA – Pioneer Foods, a subsidiary of PepsiCo South Africa has acquired the remaining half of Futurelife Health, eight years after buying its initial stake in the maker of nutrient-dense breakfast cereals and snacks.
BizCommunity reports that the transaction, which is subject to some administrative condition’s precedent, is expected to close and be effective in the first week of July after the South African Competition Commission recommended the conditional approval of the acquisition earlier this month.
According to the commission, the transaction does not raise any competition concerns as Pioneer Foods is already in a position of joint control over Futurelife. Both companies compete with several large players in the market for ready-to-eat-cereals.
The proposed transaction sees Pioneer Foods purchasing the 50% shareholding in Futurelife owned by the food company’s founder Paul Saad. As a result, Futurelife will be a wholly-owned subsidiary of Pioneer Foods.
The acquisition follows that, in 2015, pioneer Foods acquired the initial 50% of the issued shares in Futurelife after which a condition was attached to the approval of that transaction.
This condition stated that, for five years, the two businesses must be administered independently from each other, however, the set condition expired in November 2020.
Pioneer Foods is a wholly owned subsidiary of Simba Proprietary Limited since March 2020, which, in turn, is wholly owned by PepsiCo, a multinational food and beverage company organized into five different categories, namely bakeries, grains, snacks (including fruit), foods, and beverages.
On the other side, Paul Saad founded Futurelife in 2007 with a broader product range, with an emphasis on nutrition and health based on uniquely formulated recipes. The company’s flagship product Futurelife is an innovative brand within the cereals market
Riaan Heyl, PepsiCo South Africa CEO said that they believe its product basket will complement Pioneer Foods’ current portfolio.
“Upon closing of the transaction, we look forward to welcoming the Futurelife employees into PepsiCo,” he added.
” This will also mean that qualifying employees will be entitled to participate in our employee share ownership scheme, the Basumi Trust.”
PepsiCo South Africa noted that the South African Competition Commission confirmed that the proposed transaction does not raise any public interest concerns that are not addressed through this undertaking, which promotes a greater spread of ownership by employees.