South Africa’s Competition Commission conditionally approved PepsiCo’s Inc $1.7 billion takeover of food and drinks producer Pioneer Food Group Ltd on Tuesday, saying it is unlikely to lessen competition in relevant markets.
PepsiCo struck a deal to buy South Africa’s Pioneer in July, lifting the target firm’s shares and boosting a sector that has been hit by drought and tough trading conditions.
The commission recommended that the Competition Tribunal, which makes the final decision, approve the merger subject to public interest commitments, it said in a statement.
Those include a moratorium on merger-related job cuts for a certain period, and the creation of additional positions at the merged firm.
The company is also required to invest in the operations of the merged company and the agricultural sector, and establish an enterprise development fund.
It will also have to undertake a black empowerment deal to the value of at least 1.6 billion rand ($108 million) “that will promote a greater spread of ownership and participation by workers (and) historically disadvantaged South Africans”.