Cape Town - The Competition Tribunal has approved with conditions the merger whereby newly formed entity Parentco intends to acquire Edcon.
"Conditions were added, however, with regard to the retention of jobs, increasing employment, retaining its present Black Economic Empowerment shareholder participation and expanding its procurement from local suppliers," the Tribunal said in a statement.
It indicated that Parentco and its shareholding companies are special purpose vehicles, incorporated specifically for the purposes of the transaction and none of them has any prior business activities or operations in South Africa.
The Tribunal noted that Edcon’s creditors will be the shareholders. They comprise private equity investment firms and banks and none of the shareholders are active in the retail market.
The Edcon Group is active in the retail of apparel through various divisions which sell men’s, women’s and children’s wear, cosmetic products and cellular products, as well as credit and financial services products through its partnerships with Hollard and Absa Bank.
It consists of various entities such as Edgars, Edgars Active, Red Square, Legit Stores, Boardmans and Samsung.
Edcon, with a combined workforce of about 43 000, plans to employ and train a further 2 000 new staff who will be deployed in stores throughout SA.
Depending on economic and trading conditions, including the retailer's financal performance, these additional staff are expected to be employed within the next two years.
The transaction is expected to be concluded by early 2017.
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