The Competition Tribunal on Friday heard an urgent interim relief application by beverage manufacturer Coca Cola Beverages South Africa (CCBSA), which claims that conditions of the merger, whereby the Coca-Cola Company (TCCC) bought brewing and beverage company SABMiller shares held in Coca Cola Beverage Africa (CCBA), have been breached.
The respondents are Anheuser-Busch Inbev (AB InBev); South African Breweries (SAB); the chairperson of the Zenzele Employee Trust Allocation Committee; and the Competition Commission.
CCBA at the time of the merger was a subsidiary of SABMiller Group. As a result of the merger, SABMiller employees were transferred to CCBSA.
As part of their employment with SAB, these employees were beneficiaries of the Zenzele Trust, under the umbrella of the Zenzele scheme – SABMIller’s broad-based black economic empowerment programme.
During the merger hearings, SABMiller undertook that these former employees would continue to benefit from the Zenzele scheme as if the merger never happened. The undertaking became a merger condition imposed by the tribunal.
In late 2019 and in anticipation of the impending maturation of the Zenzele Scheme in April this year, the allocation committee communicated to certain beneficiaries that top-up benefits would be allocated to certain beneficiaries but not the former SABMiller employees.
CCBSA believes the former SABMiller employees must be included.
The respondents, however, communicated that the top-up allocation did not apply to former SABMiller employees and that this fell outside of the ambit of the merger condition.
CCBSA reported this to the commission, which is still investigating the matter.
CCBSA says it is unlikely that the investigation will be completed by the time the scheme matures and, therefore, brought the application on an urgent basis as the date of allocation of the top-up shares is March 31.
CCBSA requested the respondents to await the findings of the commission’s investigation before allocating the remaining participation rights – this request was refused.
CCBSA now seeks an order from the tribunal preventing the dissipation of top-up funds before the commission’s investigation is completed.
Alternatively, it seeks an order that appropriate provision be made for benefits that have also accrued to former SABMiller employees, pending resolution of the complaint to the commission.