Tribunal approves forestry merger with conditions
The Competition Tribunal has approved a forestry merger that will see Cape Forests Products (Pty) Ltd (“Cape Forests”) acquire sole control of MTO Forestry (Pty) Ltd (“MTO”) and PG Bison Southern Cape (Pty) Ltd (“PGBSC”). The transaction has been approved subject to conditions governing supply, transparency, employment and broader public interest considerations.
Cape Forests is a newly established holding company jointly controlled by PG Bison (Pty) Ltd, a manufacturer of wood-based decorative panels in Africa, and Wild Peach Investments (Pty) Ltd. In terms of the merger, a minority shareholding will be held through a newly ring-fenced company, incorporated to hold the interest in Cape Forests for the benefit of a community trust yet to be established. The beneficiaries will comprise numerous communities located within MTO Forestry’s operations.
MTO operates softwood plantations in the Southern Cape, producing pine sawlogs for internal use and for sale to third-party sawmills. It operates the MTO George sawmill in the Western Cape and the MTO Longmore sawmill in the Eastern Cape. PGBSC similarly operates a softwood plantation in the Western Cape, producing pine sawlogs for its Thesen sawmill in the Western Cape. It supplements its demand for sawlogs by buying sawlogs from third party plantations, including from MTO.
A full press release will follow in due course.