The Competition Tribunal has approved, without conditions, the disposal of JSE-listed Tongaat Hulett’s starch business to fellow-listed Barloworld.
However, the transaction still awaits approval from the competition authorities in Indonesia, while a third-party investigation into a material adverse change (MAC) in the sale and purchase agreement between Tongaat and Barloworld is yet to be resolved.
Barloworld in May raised concern about Tongaat’s starch business, which it intended to acquire, believing that Covid-19-related impacts on the earnings of the business had resulted in an MAC to the terms of the agreement.
The companies then decided to refer the matter to an independent accountant who would determine if such a change had taken place.
The acquisition cannot proceed if the MAC determination has not been finalised. If the determination has not been made by the longstop date for the acquisition, which is October 31, then the deal will be terminated.
Tongaat maintains that a MAC has not occurred and remains commited to the implementation of the disposal.