PepsiCo South Africa will soon acquire the remaining 50% stake in Futurelife Health products after buying the initial 50% in 2015.
Pioneer Foods, a subsidiary of PepsiCo, will be the acquiring firm and will see the company purchase CEO Paul Saad’s 50% shareholding in Futurelife.
Earlier this month, the South African Competition Commission recommended the conditional approval of this acquisition.
It found the transaction does not raise any competition concerns as Pioneer Foods is already in a position of joint control over Futurelife. Both companies compete with several large players in the market for ready-to-eat-cereals.
Afterwards, the Competition Tribunal considered the commission’s recommendation, which then issued its order to approve the merger on 29 May 2023.
The transaction is expected to close and be effective in the first week of July.
“Paul Saad founded Futurelife in 2007. The original Futurelife Smart Food (which remains the company’s flagship product) was developed as a scientifically formulated, balanced, nutritious convenient food which contains Moducare,” PepsiCo said in a statement.
“Over time, Futurelife developed a broader product range, with an emphasis on nutrition and health, based on its uniquely formulated recipes. The development of these products, and other product innovations, were partly enabled through the investment by Pioneer Foods in Futurelife in 2015.”
After acquiring the initial 50% of the issued shares in Futurelife in 2015, a condition was attached to the approval of that transaction.
This condition stated that, for five years, the two businesses must be administered independently from each other. This condition expired in November 2020.
Since March 2020, Pioneer Foods has been a wholly-owned subsidiary of Simba Proprietary Limited which, in turn, is wholly owned by PepsiCo.
Futurelife will be a wholly-owned subsidiary of Pioneer Foods.
PepsiCo South Africa CEO Riaan Heyl said, “Upon closing the transaction, we look forward to welcoming the Futurelife employees into PepsiCo.”
“This will also mean qualifying employees will be entitled to participate in our employee share ownership scheme, the Basumi Trust.”
*Headline image: Riaan Heyl, PepsiCo South Africa CEO