The Competition Tribunal has conditionally approved the acquisition of Imperial Logistics by DP World.
DP World is ultimately controlled by the Dubai government. The conglomerate has been steadily expanding into Africa over the last few years.
The tribunal says the transaction for 100% of Imperial Logistics was “unlikely to substantially prevent or lessen competition in any market in South Africa”.
However, the deal has been approved subject to public interest-related conditions.
This includes the establishment of an employee share ownership programme (Esop) through which employees in South Africa will have a 5% interest in Imperial Logistics South Africa Group (ILSA), a subsidiary of Imperial Logistics.
Within 24 months of the merger implementation date, the new entity is to establish an Esop through which Imperial employees (excluding top and senior management) will benefit from an interest in ILSA through an employee trust.
Imperial employees will not be required to pay to participate in the Esop.
The Esop shareholding should also not substitute the existing historically disadvantaged persons shareholding in ILSA.
Imperial Logistics will also increase its enterprise and supplier development expenditure in South Africa, as well as its spend on corporate social responsibility initiatives and the training and development of black persons and procurement from black persons, says the Tribunal.
Imperial has also committed to incur capital expenditure of no less than R2.1-billion in South Africa over four years, ending June 30, 2025.
The tribunal also notes that no Imperial Logistics employees may be retrenched as a result of the acquisition for a period of three years from the implementation date.
The transaction is to be implemented on March 14.
Imperial is to delist from the JSE on March 15.
Gateway to Africa
“We are excited about concluding this transaction, which will be value-enhancing for our people, clients and principals, for our service offering across the markets we serve, and for our other key stakeholders who will benefit from DP World’s leading technology, capabilities, global networks, scale and key trade-lane volumes, while enabling us to build on our Gateway to Africa strategy and growth ambitions,” says Imperial Group CEO Mohammed Akoojee.
“Combining DP World’s world-class infrastructure, specifically its investment and expertise in ports on the African continent, with Imperial’s logistics and market access platforms, will enable us to offer integrated end-to-end solutions along key trade lanes into and out of Africa,” he adds.
“We are excited to conclude our acquisition of Imperial, which has a significant presence in Africa, a market where trade is expected to grow at more than twice the gross domestic product, driven by population growth, accelerated urbanisation and rising middle classes,” says DP World CEO and chairperson Sultan Ahmed Bin Sulayem.
“Imperial’s capabilities in market access and logistics and its extensive African and European footprint will complement and enhance our growth aspirations.”