The Competition Tribunal has approved a merger between independent retailer Blue Falcon and John Craig, a Pepkor subsidiary, which will save 422 jobs.
As a result of the merger, Blue Falcon will acquire certain portions and assets of the John Craig business, the Competition Tribunal announced on Thursday.
Blue Falcon specialises in sports-lifestyle, "athleisure" oriented men's clothing, footwear and accessories. It sells international sporting, leisure and lifestyle brands such as Adidas‚ Ellese, Puma‚ Converse‚ Nike‚ Guess‚ Superga and Levi's.
In November 2020, Pepkor announced that it would be selling John Craig as the appetite for expensive brands and formalwear declined.
The merger between Blue Falcon and John Craig was approved subject to public interest-related conditions, particularly employment and local procurement concerns.
"In regard to competition concerns, the Tribunal has found that the merger is unlikely to substantially prevent or lessen competition in any relevant market in South Africa," said the Competition Tribunal in a statement.
The 422 transferred employees exclude certain executives who have concluded "opt–out" agreements and voluntary separation agreements with Pepkor Speciality, said the Competition Tribunal.
There will be a two-year moratorium on retrenchments from the merger's implementation date, which has not yet been announced.
In response to a concern raised by The Department of Trade, Industry and Competition about the effect of the transaction on local procurement, Blue Falcon agreed to a condition that it will use its best efforts to procure the labels it intends to offer at the John Craig stores from local manufacturers.
The merger agreement requires the parties to provide the Competition Commission with detailed annual reports for a period of two years, regarding their compliance with the conditions.