Pioneer Food Group, the South African food processor, has confirmed that its proposed acquisition of a stake 50% stake in nutritional cereal maker Futurelife Health Products has been cleared by local competition authorities.
In a statement, Pioneer said it was "pleased" that the transaction has now received competition approval. "The Competition Tribunal of South Africa has approved the Futurelife transaction, subject to two conditions that will have no negative impact themselves on the commercial prospects of the Futurelife business and are acceptable to both parties."
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The Tribunal stipulated Futurelife founder Paul Saad must manage the JV for at least five years and Pioneer must maintain current investment levels in its competing ProNutro brand for two years. It also said the companies must ensure information is not passed from the joint venture to competing brands in the Pioneer portfolio.
Pioneer entered into a deal to acquire a stake in Futurelife in April for an undisclosed sum. At the time, the company said the deal would "complement its existing product portfolio with the addition of one of South Africa's fastest-growing health brands within the functional foods category in which Pioneer Foods is not currently represented".
The proposal became the subject of a Competition Commission Tribunal investigation, with the likes of Kellogg providing evidence in an attempt to block the deal. Pioneer produces cereal brands including ProNutro, Spekko, Sasko, Bokomo and Weetbix and concerns were raised that the merger could hit competition in the instant porridge sector.
A spokesperson for Kellogg's South African business did not immediately respond to request for comment.
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