The Tribunal has approved the transaction subject to conditions relating to public interest factors, particularly employment and ownership by historically disadvantaged persons (HDPs), says The Tribunal.
 
The Tribunal hears the matter on Tuesday, 17 June, Wednesday, 2 July and Wednesday, 13 August, where  the Competition Commission (Commission), the merger parties, the National Union of Metalworkers of South Africa (NUMSA) and the Food and Allied Workers Union (FAWU) make submissions, including on matters identified by the Tribunal for clarification, as well as revised conditions submitted by the merger parties and the Commission after oral submissions by the unions at the hearing, says The Tribunal.

Conditions

Employment: For a period of two years after the merger's implementation, the merged entity may not retrench any of its employees in South Africa as a result of the merger. In addition, Barloworld employees' existing terms and conditions of employment will not be changed as a result of the merger, says The Tribunal.
 
Employee and HDP Ownership: In terms of the imposed conditions, the merger parties will implement two phases of HDP transactions that, together, will give HDPs and participating employees a collective 13.5% shareholding in Barloworld. This will be implemented in two phases:
 
Phase 1

Within one day of the merger being implemented, the merger parties will implement Phase 1. This involves the retention of a 3.5% shareholding in Barloworld as at the merger approval date by the Barloworld Empowerment Foundation, says The Tribunal.
 
Phase 2

Phase 2 involves the acquisition of a further collective 10% of Barloworld’s issued shares by HDPs and participating employees. This includes a 5% stake for employees through an employee share ownership programme (ESOP) and a 5% stake for a women-led HDP consortium, to be selected and approved by the merged entity, adds The Tribunal.
 
"Participating employees" are permanent employees of Barloworld (or its subsidiaries and associate companies), the majority of whom are HDPs, who have been employed for at least six months. They must not be serving a notice period, involved in settlement negotiations to end their employment or facing disciplinary action that could lead to dismissal or an enquiry concerning misconduct. The definition excludes fixed-term or limited-duration employees, those employed through a temporary employment services provider and anyone who ceases to be a Barloworld employee, says The Tribunal.
 
Phase 2 will be implemented within 24 months of Barloworld's delisting from the JSE and A2X securities exchanges, following the merger's implementation. The merger parties' commitment to implement Phase 2 will only apply if the acquiring firm's squeeze-out right under section 124 of the Companies Act has become capable of being exercised and if Barloworld is delisted, adds The Tribunal.

Before implementing Phase 2, the merged entity must provide the Commission with details of the proposed Phase 2 transactions in writing, at least 100-days before the 24-month period expires. These details must include the identity of the women-led HDP consortium or shareholders, including evidence that the prospective HDP shareholders are appropriately classified as HDPs. The Commission will then have 45 days to review the submission and provide approval or feedback, concludes The Tribunal.

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