Tiger Brands plans to buy Davita for R1.345bn
Consumer goods group Tiger Brands announced on Tuesday (15 February 2011) that it had entered into an agreement to buy the whole of Davita for R1.345 billion in cash.
Davita is a South African manufacturer and exporter of powdered seasonings and beverage products with a presence in 28 countries across Africa and the Middle East.
Tiger said the acquisition would further increase its presence in Africa, as the continent was identified as one of its key strategic thrusts for growth.
"Consistent with its growth strategy, Tiger Brands has been progressively building its sales and marketing infrastructure to service Africa.
"This has resulted in strengthened regional sales and marketing representation across large parts of the continent, enabling the company to increase brand awareness and improve product activation for new products and markets," the company said after its annual general meeting on Wednesday, 16 February.
Tiger said Davita had an established distribution footprint on the African continent, which would provide Tiger Brands' export division with new growth vectors by leveraging off Davita's solid distributor relationships and penetrating new geographies as well as deepening market penetration in existing markets.
"The existing infrastructure within the Tiger Brands export division will assist in driving further growth across the expanded product portfolio. Davita will provide additional synergies as a potential manufacturer of certain products for Tiger Brands' South African business units," it said.
After implementation of the proposed deal, Davita will be retained as a self-standing entity within the Tiger Brands group. The relationship with distributors will not be affected as a result of the deal.
The sellers of Davita are Corvest 6 (Pty) Ltd, RZT Zelpy 4976 (Pty) Ltd and David Desilets.
The acquisition was subject to the fulfilment of a number of conditions precedent, including the unconditional approval by the South African competition authorities.
Source: I-Net Bridge
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