1
COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: LM060Jul20
In the matter between:
Unilever PLC Primary Acquiring Firm
and
Unilever N.V. Primary Target Firm
Panel : Yasmin Carrim (Presiding Member)
: Andreas Wessels (Tribunal Member)
: Andiswa Ndoni (Tribunal Member)
Heard on : 06 August 2020
Order Issued on : 06 August 2020
Reasons Issued on : 28 August 2020
Reasons for Decision
[1] On 06 August 2020, the Competition Tribunal (“Tribunal”) unconditionally
approved the transaction involving Unilever PLC and Unilever N.V.
[2] The reasons for approving the proposed transaction follows.
Parties to the proposed transaction
Primary acquiring firm
[3] The primary acquiring firm is Unilever PLC, an entity incorporated under the
laws of the United Kingdom. Unilever PLC is listed on the London Stock
2
Exchange as well as the New York Exchange and is not controlled by any
single firm. Unilever PLC directly controls numerous firms which in turn control
other entities.
Primary target firm
[4] Globally, the primary target firm is Unilever N.V. Unilever N.V. is listed on the
Euronext Amsterdam Exchange as well as the New York Stock Exchange and
is not controlled by any single firm. Unilever N.V directly controls numerous
firms which in turn control other entities.
[5] In relation to South Africa, the target firm is Unilever SA Holdings ("Unilever
SA Holdings") which is controlled by Unilever PLC and Unilever N.V. Unilever
SA Holdings is the holding company of the Unilever Group’s South African
businesses and controls Unilever South Africa (Pty) Ltd (“Unilever SA”).
[6] For the sake of convenience, Unilever PLC, Unilever N.V and all of Unilever’s
global businesses and entities will collectively be referred to as the “Unilever
Group”.
Proposed transaction and rationale
[7] According to the merging parties, the Unilever Group was created and is
maintained by a series of agreements between Unilever N.V. and Unilever
PLC, together with special provisions in their respective articles of association.
These agreements are together known as the "Foundation Agreements". The
Foundation Agreements enable the Unilever Group to achieve unity of
management, operations, shareholders' rights, purpose, and mission.
Accordingly, although Unilever N.V. and Unilever PLC are separate legal
entities, they effectively operate as a single economic entity.
3
[8] In terms of the proposed transaction, the two ultimate parent undertakings of
the Unilever Group, namely Unilever N.V. and Unilever PLC will be unified
under Unilever PLC as the new ultimate controller of the Unilever Group.
[9] The transaction will be implemented by collapsing the dual-headed holding
company structure and bringing the group under the single and ultimate control
of Unilever PLC. This will be achieved by means of a cross-border merger,
pursuant to which:
[9.1] Unilever PLC would acquire all assets, liabilities and legal
relationships of Unilever N.V. (including all subsidiaries of Unilever
N.V.);
[9.2] Unilever N.V. would cease to exist;
[9.3] Unilever PLC would allot new Unilever PLC shares to the former
Unilever N.V.
[9.4] shareholders on a one-to-one basis;
[9.5] Unilever PLC would become the sole parent company of the Unilever
Group; and
[9.6] Unilever PLC would be listed in London, Amsterdam and New York
Stock Exchanges.
[10] Following the implementation of the proposed transaction, the current Unilever
N.V. and Unilever PLC shareholders will be shareholders of Unilever PLC and
Unilever PLC will be the ultimate controlling entity of the Unilever Group
(including Unilever SA Holdings).
Impact on competition
[11] The Unilever Group has a presence across much of the globe and is involved
in the manufacture and supply of a range of products including food,
beverages, cleaning agents and personal care products. The group's business
is organised in three divisions, namely Food and Refreshment, Home Care,
and Beauty and Personal Care, each of which has a clearly defined strategy
and portfolio of brands.
4
[12] The Commission considered the activities of the merging parties and found
that the proposed transaction relates to the internal reorganisation of the
Unilever Group and therefore does not alter the structure of any market.
[13] The Commission submitted that given the nature of the proposed transaction,
it is unlikely to substantially prevent or lessen competition in any market in
South Africa. The Commission submitted that they also contacted the
customers and competitors of Unilever SA, who confirmed that they do not
have concerns or objections to the implementation of the proposed
transaction.1
[14] In light of the above, the Commission recommended that we approve the
proposed transaction unconditionally.
Public interest
[15] The proposed transaction will not have any negative effect on employment in
South Africa and raises no other public interest concerns.2
Conclusion
[16] In light of the above, we concluded that the proposed transaction is unlikely to
substantially prevent or lessen competition in any relevant market. In addition,
no public interest issues arise from the proposed transaction. Accordingly, we
approve the proposed transaction unconditionally.
1 Customers of Unilever SA who made submissions to the Commission’s request are: SPAR Group and Shoprite
Group. Competitors of Unilever SA who made submissions to the Commission’s request are: AVI; Reckitt
Benckiser Pharmaceuticals (Proprietary) Limited; Bliss Brands (Pty) Ltd; Colgate-Palmolive SA; P&G South
Africa Trading (Pty) Ltd
2 The Commission is of the view that the proposed transaction will not raise employment concerns
considering that the merging parties have provided an unequivocal statement that the proposed
transaction will not result in retrenchments.
5
____________________ 28 August 2020
Ms Yasmin Carrim DATE
Mr Andreas Wessels and Ms Andiswa Ndoni concurring
Tribunal Case Manager : Ms Busisiwe Masina
For the merging parties : Ms Lerisha Naidu of Backer & McKenzie
For the Commission : Sewela Moshoma and Thabelo Masithulela