Anti-Israel Lobby Endangers South African Dairy Takeover
(Bloomberg) -- A 4.8 billion-rand ($354 million) buyout of South Africa’s biggest dairy company, Clover Industries Ltd., by an Israeli-led group is under threat after protests by a pro-Palestinian activist group.
Brimstone Investment Corp., which is part of the bidding group led by Tel Aviv-based Central Bottling Co., is reviewing its role in the transaction, the company said in a statement on Thursday. Clover shares plunged as much as 9.8 percent, erasing part of the gains made when the deal was announced three days ago.
“We have taken note of the widespread outrage in respect of Brimstone’s participation in the proposed purchase,” the black-owned South African company said.
The country’s ruling African National Congress had close ties to the Palestine Liberation Organization during the apartheid era and Israeli interests are frequently the target of protests in South Africa. Brimstone says on its website that it has “impeccable empowerment credentials and a values-driven corporate identity.”
The deal was opposed by Boycott Divestment Sanctions South Africa, a group with a history of anti-Israel activity. “We will actively initiate, support and/or join the call for direct action and a militant but peaceful campaign,” the organization said. That will include “protests and disruptions against Clover and a boycott of all of its products.”
BDSSA in 2014 led calls for a boycott of Woolworths Holdings Ltd., an upmarket South African retailer, because of its sale of figs, pretzels and pomegranates imported from Israel. Woolworths said at the time that some of its customers and staff had been intimidated during protests inside its stores and pig heads were left in some outlets.
The acquiring group offered 25 rand a share for Clover, compared with a Friday closing price of 20 rand. The investment vehicle is 60 percent owned by CBC, the owner of Israel’s Coca-Cola Co. franchise. Brimstone’s stake is 15 percent.
Clover shares closed 4.1 percent lower at 22.05 rand in Johannesburg.
©2019 Bloomberg L.P.