Commission conditionally approves the acquisition of Power Play by Newco, a wholly-owned subsidiary of Monster Beverage Corporation
The Competition Commission approved the intermediate merger in terms of which New Laser Corporation (Newco) acquired Power Play, a brand of The Coca Cola Company. Newco is a special purpose vehicle formed specifically for the proposed transaction and a wholly-owned subsidiary of Monster Beverage Corporation (Monster).
This was the only portion of a multibillion dollar global transaction between The Coca Cola Company and Monster that required merger notification in South Africa. The merging parties are both active in the commercial beverages industry in South Africa. Their products compete in the extensive ready-to-drink beverage market that comprises a wide range of non-alcoholic “ready-to-drink” beverages.
Even having regard to the energy segment in particular, the Commission found that the proposed transaction does not give rise to any competition concerns.
Although the Commission found that the proposed transaction was unlikely to result in any employment losses in the merged entity, it, considered the effects on employment that might arise as a result of the possible termination of the Monster Beverage distribution contract with Super Group (a transport logistics and mobility group), which could affect 81 employees at Super Group. The Commission therefore imposed a condition in terms of which Monster may not terminate its exclusive distribution agreement with Super Group for a period of one year.