Growth in the global consumer goods sector over the last decade has been strong. In addition to significant investment and innovation from market leaders in the sector, this has been driven by rising population numbers and incomes, particularly in emerging markets in Africa and Asia.
In Africa, growth in population, middle-class entrants, urbanisation and GDP per capita are all forecast to exceed growth in developed markets for the foreseeable future. This will continue to create significant opportunities for participants in the consumer goods sector.
At the same time, consumer goods companies continue to face a number of significant challenges to traditional operating models. Among these challenges are heavier taxes and increasing (often uncertain) regulation. The influence of technology, especially developments in online retail and social media, on traditional retail and consumer-focused businesses also cannot be overlooked.
We are uniquely positioned to advise consumer goods companies on all aspects of their businesses in Africa. We have an exceptional track record of having advised some of the world’s leading companies in this sector (food and beverage, household goods, luxury goods, personal care products and tobacco) on all aspects of their operations, businesses and corporate transactions. We have extensive experience in advising clients on all aspects of the following as they apply in the context of the African consumer goods sector:
- Corporate/ M&A
- Competition law
- Advertising and advertising standards
- Tax (including customs and excise)
- Regulatory compliance and lobbying
- Dispute resolution
- Commercial arrangements (including sales and distribution)
- Consumer protection
- Technology, media and telecommunications
In particular, we understand the need to have a thorough understanding of our clients’ businesses and the risks posed to them by an ever-changing regulatory landscape. In this vein, we have enjoyed significant success in assisting major multinational clients in their engagements with various government entities in all of the jurisdictions in which we operate (and, through our relationships with independent firms in other key jurisdictions, across the continent) on matters ranging from customs and excise adjudications to influencing regulations.
Most recently, we have advised one of the world’s leading beverage companies in relation to the establishment of a pan-African joint venture with another global leader in the sector for the production, sale and distribution of soft-drinks.
- We advised Woolworths Holdings (as issuer), Woolworths (as guarantor), Rand Merchant Bank (as manager), and The Standard Bank of South Africa acting through its Corporate and Investment Banking Division (as manager), on the issue of ZAR 750 million senior unsecured floating rate notes due 10 October 2020 under the issuer’s ZAR 10 billion DMTN programme.
- We assisted the University of Cape Town (UCT) to implement a strategy to regulate trade union recognition in response to the fragmentation of traditional union membership patterns, including urgent Labour Court litigation and strike interdict. UCT has suffered significant disruption in recent years from student protests, in part related to industrial relations and the change in trade union affiliations.
- We advised Nedbank Corporate Investment Bank (as lender) on the granting of a USD 10 million pre-export uncommitted facility to Afrisian Ginning.
- We advised Anheuser-Busch InBev (AB InBev) on the African elements of its exit from its 54.5 % stake in Coca-Cola Beverages Africa. The transaction was valued at USD 3.15 billion.
- We advised on the complete restructure of The House of Busby’s capital structure and third-party debt, thereby avoiding its liquidation and securing our clients’ investments. Busby holds the licences for, among others, Aldo, Forever New and Guess, and is therefore an important competitor in the South African retail fashion market.
- We advised Associated British Foods plc (ABF) in respect of the acquisition of the entire issued share capital of Illovo Sugar, not already owned by ABF’s wholly owned subsidiary, in a transaction valued at ZAR 5.6 billion.
- We advised Sphere Investments (a highly performing investment company) on the acquisition of a stake in Consol Holdings by Sphere RMB JV, a wholly owned subsidiary of Sphere Investments.
- We advised the Abraaj Group in relation to its acquisition of Java House from fellow private equity investor, Emerging Capital Partners.
- We advised Weetabix Group, Bowmans acting as Kenyan local counsel, in relation to the acquisition by Post Holdings Inc, of Latimer Newco 2 (which controlled the target Weetabix group of companies including the Kenyan company known as Weetabix East Africa Ltd).
- We advised East Africa Bottling Share Company (EABSC), an Ethiopian subsidiary of Coca-Cola Beverages Africa (CCBA), in relation to a transfer of shares from three of EABSC’s four minority shareholders, namely Munir Duri, Abinnet Gebremeskel and Derege Yessuwork, to four CCBA group companies, namely Coca-Cola Sabco (East Africa), Global Service Company in Dubai, Ambo International Holdings and Strategic Alliance J.V. in Mauritius.
- We advised Appletiser South Africa in relation to an acquisition of 21.5% of its ordinary shares by two black economic empowerment investors, namely African Pioneer Beverages (17.5%) and Excellent Madlala (4%).
- We advised Coca-Cola Beverages Africa and its subsidiary, Coca-Cola South East Africa, in relation to its acquisition of the major part of the 33% minority interest not already held by it in East Africa Bottling Share Company based in Ethiopia.
- We advised Zhonghong Holding Co. Ltd, a Chinese resort developer and large-scale tourism industry project management company, in relation to its USD 412 million acquisition (through one or more affiliates) of a 90.5% stake in tour operator Abercrombie & Kent Group of Companies S.A. (by acquiring certain Abercrombie & Kent entities located in South Africa and Tanzania).
- We advised AB InBev in relation to its disposal of a 54.5 % stake in Coca-Cola Beverages Africa Pty Ltd, an African joint venture company, to the Coca-Cola Company in a transaction valued at USD 3.2 billion. We advised AB InBev on all African elements of the transaction. The transaction was undertaken and completed at high speed, which our M&A team facilitated. We also provided tax advice in relation to the transaction, and regulatory advice in the form of competition approvals that were required. This matter involved South Africa and 13 other African jurisdictions, namely Comoros, Ethiopia, Kenya, Mayotte, Mozambique, Namibia, Tanzania, Uganda, Nigeria, Ghana, Swaziland, Botswana and Zambia.
- We advised SABMiller in relation to the consolidation of the non-alcoholic beverage bottling operations of SABMiller, The Coca-Cola Company and Gutsche Family Investments (majority shareholder in Coca-Cola Sabco) to create Coca-Cola Beverages Africa, the biggest bottler of soft drinks in Africa and the tenth largest in the world, with annual revenue of USD 2.9 billion.
- We advised SABMiller in relation to the USD 102 billion acquisition by AB InBev of the entire issued, and to be issued, share capital of SABMiller (which closed in 2016). This was the third largest M&A transaction globally in history and the largest in South African history at the time.
- We advised Dis-Chem Pharmacies in relation to its primary offer and listing on the Johannesburg Stock Exchange, valued at ZAR 16 billion.
- We advised a large international hotel chain in relation to its arrangements with a local Kenyan entity on its possible establishment of operations in Nairobi. We advised on the due diligence on the land on which the hotel will be developed and various corporate and commercial matters, including the transaction documents for the commercial arrangements between our client and the local Kenyan entity.
- We advised Kleoss Capital in relation to the acquisition of a minority stake in Real Foods (the owners of the KAUAI, NÜ Health Café and Kohu brands).
- We advised the SPAR BBBEE Employee Trust and the SPAR BBBEE Retailer Employee Trust (the Trusts) in relation to the sale of approximately 7.4 million SPAR ordinary shares, on behalf of those beneficiaries of the Trusts who elected to sell their SPAR ordinary shares for cash, by way of an accelerated bookbuild offering.
- Counsel to Kleoss Capital (specifically the Kleoss Fund I), a 100% black-owned South African private equity investment manager with a level 1 B-BBEE accreditation, in relation to its acquisition of a significant minority stake in Real Foods Proprietary Limited (owners of the KAUAI, NÜ Health Café and Kohu brands). Real Foods follows the global trend towards health and wellness, and aims to be a leader in shaping the South African natural food industry.
- Kleoss is said to be the type of equity partner who proactively engages with its investments and businesses at a board and strategy level, adding real value to the businesses in its portfolio. Real Foods describes Kleoss Capital as a “like-minded” partner with shared values of transparency, authenticity and entrepreneurial spirit.
- We advised Wilderness Holdings in relation to its acquisition of the Governors’ Camp Group of Companies in Kenya and Rwanda. Wilderness Holdings is the holding company for many of Africa’s premier ecotourism brands and is listed on the Botswana Stock Exchange and the Johannesburg Stock Exchange.
- We advised Choppies Supermarkets in relation to the acquisition of the retail business of Jwayelani Retail sold as a going concern for a transaction value of ZAR 189 million.
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