JSE-listed Clover on Friday announced that it would acquire Nestlé South Africa’s Doornkloof property, bottled water manufacturing facility and water rights for R58-million in shares in a new joint venture entity it was establishing with Nestlé.
The new entity, to be called Clover Waters, would hold the right, by way of licence, to manufacture, distribute, market and sell bottled mineral water under Nestlé’s Pure Life, Valvita and Schoonspruit brands, as well as ice tea under the Nestea brand.
These brands would complement Clover’s Aquartz bottled water and Manhattan ice tea brands, which would also be manufactured, distributed, marketed and sold by the new entity.
Clover would hold a 70% interest in Clover Waters, with Nestlé owning the balance.
The companies told shareholders in a statement that the transaction would unlock growth and shareholder value by providing a broader platform to grow their position in the supply of bottled mineral water and ice tea.
“The synergies will result in greater efficiencies and a more effective use of resources,” the parties stated.
Further, Clover’s distribution network would improve the route-to-market for Nestlé Pure Life and Nestea products and increase market penetration of these brands.
“This partnership is in line with our strategy to expand Clover’s portfolio of value-added and branded beverages products. The combined entity created by this transaction will provide Clover with great opportunities across a broader range of complementary products,” commented Clover CE Johann Vorster.
“We have been present in South Africa for almost 100 years and we continuously seek opportunities to improve our efficiencies and brand presence. This partnership is aligned to our business objectives and will allow consumers better access to our products,” added Nestlé South Africa chairperson and MD Sullivan O’Carroll.