South African holding company Libstar is to merge with Sonnendal Dairies in the Western Cape following approval by the country's competition watchdog.

Libstar is controlled by private-equity funds and has interests in a number of companies in South Africa, including within the food and beverage industry. Sonnendal's main product is yogurt, but it also makes associated dairy products and a range of juices.

The country's Competition Tribunal cleared the merger yesterday afternoon (25 October) after assessing recommendations made by the Competition Commission, which had flagged concern over what it called a restraint of trade clause.

Under that clause contained in the sale of business agreement, Sonnendal cannot operate outside of its existing business scope of Western Cape province for three years.

A statement announcing the merger approval said: "The Tribunal approved the condition whereby Sonnendal will continue to operate in the Western Cape where it predominately operates, but will not operate nationally for a three-year-period''.

The financial details of the transaction have not been disclosed. When contacted by just-food yesterday, a Libstar spokesperson said it was group policy not to publicly announce specific details.