Tribunal approves IDC’s buyout of Celrose, with conditions

15th April 2019 By: Tasneem Bulbulia - Creamer Media Reporter

The Competition Tribunal has approved, with conditions, the proposed transaction whereby the Industrial Development Corporation (IDC) plans to acquire clothing and footwear manufacturer Celrose of which embattled retailer Edcon is a majority shareholder.

The IDC is State-owned and provides financial support to businesses. It also provides finance to entrepreneurs through loans and equity.

The IDC holds interests in several companies in various industries, including textiles, clothing and agriculture.

Celrose owns Eddels Shoes and supplies clothing and footwear to the Edcon group and other retailers in South Africa and Zimbabwe.

To address merger-related employment concerns raised by trade unions, Celrose may not retrench any employees as a result of the merger for a period of five years from the implementation date of the merger.

Celrose must also, during the first five-year period of an amended merchandise supply agreement with Edcon, provide reports to the Competition Commission in relation to the agreement’s background.

Under the terms of the merchandise supply agreement, Edcon will continue to procure products from Celrose and Eddels following the transaction.