Proposed AgriGroupe, AFGRI merger welcomed

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Whilst the forum is still to study the material conditions of the offer in more detail as well as engage fully with the various interested parties, it is the forum's view that not only will the merger transaction benefit South Africa by injecting much-needed direct foreign investment but, the transaction also stands to enhance the current equity participation in AFGRI by previously disadvantaged persons and therefore advance the economic transformation objectives of the country.

Favour black farmers

"Notwithstanding the obvious positive impact the transaction will have on transformation in the sector through increased equity participation by blacks in AFGRI, we understand that the merged entity will be in a better position to invest more in enterprise and supplier development in favour of emerging black farmers and agro-processing entities thus enhancing their competitiveness and growth," said the Forum's executive director, Mbuyi Simelane.

"Also, given the strategic vertical business structure of AFGRI, we are further encouraged by the company's commitment to working in partnership with relevant bodies and government as it seeks to contribute to food security in South Africa and the rest of the African continent."

Public interest concerns

The Forum is not indifferent to certain public interest concerns caused by the announcement of the proposed transaction. However, the purpose of public interest concerns is not to protect or advance certain self-interests from losing out to market forces, but to protect and advance substantial public interest.

"We trust that the merging parties will consider the legitimate public concerns raised and respond appropriately by offering remedies to any such concerns, albeit that the merged entity may not legally be obliged to do so," Simelane concluded.