Jobs clauses for Heinz-Pioneer merger

The Competition Commission has recommended to the Competition Tribunal that the proposed merger of Heinz Food SA and Pioneer Foods be approved, with conditions.

The merger was first approved unconditionally by the tribunal in 2003.

In November 2017, Pioneer Foods announced it would acquire the outstanding 50.1% in its joint venture from Heinz SA, a subsidiary of the Kraft Heinz Company. Pioneer has been a majority shareholder of Heinz SA, a food manufacturing and distribution joint venture established in 2003.

However, the Competition Commission said on Wednesday the proposed transaction, which would result in Heinz SA becoming a wholly owned subsidiary of Pioneer Food, would have a negative effect on employment, as it would probably result in certain employees being retrenched.

To mitigate this, the commission recommended to the tribunal that the transaction be approved subject to the condition that the merging parties may not retrench any unskilled employees and employees with a qualification less than Grade 12 within two years of the merger being implemented.

In a statement, the Competition Commission said that “although certain skilled and semiskilled employees are likely to be retrenched as a result of the proposed transaction, the commission further imposed a condition that this number should not exceed 27”.

The competition body further said that, in the event of retrenchments, the affected employees should enjoy preference in respect of any suitable positions that may become vacant within 12 months of the retrenchment date.