Photo Credit: Werner Hills.
The Competition Commission has recommended that the Competition Tribunal conditionally approve The Foschini Group's proposed transaction to acquire Jet stores.
The Foschini Group, also known as TFG, put an offer to buy Jet from Edcon for a cash purchase consideration of R480 million. TFG announced last month that is had concluded a purchase agreement, reports said.
The cash-strapped Edcon Holdings filed for bankruptcy protection in April after losing R2 billion during the hard lockdown to curb the spread of COVID-19, which has claimed almost 16 000 lives in South Africa.
TFG is one of the foremost independent chain store groups in South Africa.
The group has a diverse portfolio of 29 leading fashion retail brands offering clothing, jewellery, cell phones, accessories, cosmetics, luggage, sporting apparel and equipment, homeware, and furniture. It also offers insurance products.
Meanwhile, the Jet division sells clothing, footwear, homeware, cosmetics, cellular and insurance products locally, and also has stores in Botswana, Namibia, Lesotho and the kingdom of Eswatini.
“The Commission found that the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in any relevant markets.
“The Commission and the merging parties have agreed on merger conditions,” said the Commission.
These include ensuring that the merging parties retain at least 381 Jet stores and the employment of at least 4 664 Jet employees from the target firm.
“The merging parties have also committed to making efforts to increase the number of Jet stores that will be retained post-merger,” said the Commission.
The acquiring firm has agreed to give preference to eligible Edcon employees, should vacancies arise in the Jet business for three years from the implementation date.
“The merging parties have also made commitments to try to increase their procurement of locally produced inventory going forward,” the Commission said.