Kolosus deal approved

15 September 2003

The Competition Tribunal has conditionally approved the merger between Daun et Cie AG and Kolosus Holdings. However, it is conditional that Kolosus may not retrench more than 150 employees in any 'affected firm' for one year after the date of the order regardless of whether such layoffs are the result of the merger or arise in the ordinary course of business. An 'affected firm' can be any business within the Kolosus group, or any which may be added to the Kolosus group during the period and which operate in the hide trading, primary tanning or automotive tanning markets. In their submissions to the Tribunal, the South African Clothing and Textile Workers Union (SACTWU) and the South African Food and Allied Trade Union (SAFATU) did not oppose the deal but expressed concern and sought assurances that job losses as a consequence of the merger would be minimised. Under the companies' initial submission, it was indicated that the merger would, at worst, result in 150 job losses. And in the course of the hearing, the parties acknowledged that restructuring in the wake of the merger, necessitated by financial and efficiency considerations, would ultimately determine the total number of jobs lost. The transaction constitutes a sale of shares in terms of which Daun et Cie AG, a German company, will acquire control of Kolosus Holdings.

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