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Tribunal dismisses poultry 'merger' application

Mar 24 2016 12:50
Carin Smith

Cape Town - The Competition Tribunal on Thursday dismissed with costs an application by Sovereign Foods regarding what it alleged to constitute a merger by its competitor Country Bird Group.

Sovereign Foods is a producer of fresh and frozen chicken portions. Country Bird is a competitor and a direct and indirect shareholder of Sovereign. Country Bird has software specialist company Synapp as a majority shareholder.

Sovereign Foods approached the Tribunal for an order declaring that, should Country Bird directly or indirectly reinstate rights to its existing Sovereign shares or acquire additional shares, that this be considered a merger.

If Sovereign's application had succeeded, Country Bird would have been required to notify the merger to the Competition Commission. Country Bird would also have been prohibited from voting at the next Sovereign Foods shareholder meeting at the end of March if the Tribunal had deemed there to have been a merger.

Sovereign alleged that the "merger" is likely to lessen competition in the sector and raises public interest concerns. Sovereign also alleged that Country Bird has been using its voting rights to prevent certain transactions since 2009.

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