SABMiller has agreed to a deal with the South African government that will see it retain the same level of jobs in the company for the next three years after an impending merger with giant soft drinks maker Coca Cola.
The brewer, which has agreed to be acquired by Belgium-based AB InBev, has also reached a deal to invest $54 million to support farmers and help retailers, The Wall Street Journal reported.
SABMiller agreed in November to team up with Coke and privately held Gutsche Family Investments to create Africa’s largest soft drinks bottler, Coca Cola Beverages Africa, spanning 12 African countries and about 40% of Coke’s soft-drink volumes on the continent.
SABMiller will hold 57 percent of newly created Coca-Cola Beverages Africa and Coke will own 11.3 percent, while the rest will be owned by Gutsche.
The deal would also hand Coke an extra 20 brands, including sparkling soft drink Appletiser, whose fruit juice concentrate is sourced from South African producers.
Coca Cola Beverages Africa will have an estimated annual sale worth $2.9 billion.
“I am very happy that we have reached this agreement and hope we now have a clear path to the conclusion of this transaction,” Reuters quoted SABMiller Chief Executive Officer Alan Clark saying in a statement.
In mid April, AB InBev, which plans to merge with SABMiller to form one of the largest beer companies in the world, agreed to an involuntary job loss deal with the South African government as it seek an approval to its deal.
SABMiller employs more than 9,000 workers in South Africa.
The company is trying to avoid a protracted regulatory review in South Africa by striking a commitment agreement ahead of a decision by the Competition Commission, which has a history of delaying big merger deals.
The Commission investigates deals for any antitrust issues and recommends remedies to the Competition Tribunal, which makes a final ruling.
A Tribunal hearing on the proposed SABMiller-Coca Cola deal is due to start on Monday.
South Africa’s emphasis on protecting jobs after a merger has contributed to lengthy reviews of other global deals such as the soft-drink bottling tie-up among Gutsche Family Investments, Coca-Cola Co. and SABMiller.
The Coca-Cola deal was agreed to in November 2014 but hasn’t been completed to date.
SABMiller, which was established in Johannesburg in 1895, has a huge presence in Africa with presence in Botswana, Mozambique, Nigeria, South Africa, Sudan, Swaziland, Uganda, and Zimbabwe.