The long-anticipated merger between agricultural giants VKB and GWK has received its final approval from the relevant regulatory authorities, marking a significant milestone for both companies. The approval comes after the fulfilment of the final suspensive conditions required for the transaction. Starting yesterday, 31 May 2023, the two companies will operate as a new, combined group.
The Competition Tribunal initially approved the merger on Wednesday, 21 December 2022, subject to certain conditions. Following this approval, VKB and GWK swiftly agreed to the conditions set forth by the Competition Commission, leading to the final clearance.
Discussions regarding the merger began in July 2020, culminating in GWK’s shareholders voting in favour of the merger on Thursday 11 August 2022. Prior to this, VKB’s board of directors had already given their approval to the transaction, staying within their mandate earlier in 2022.
Meticulously designed
Insiders say the merger was meticulously designed and executed by representatives from VKB and GWK in collaboration with an external corporate finance advisor, Pallidus. The aim was to negotiate an agreement that safeguarded the interests of both groups, ensuring long-term benefits and the preservation of producer ownership and control.
Multiple factors, including synergies in company culture and structure, a shared vision for promoting agriculture, and continued quality service for farmers, were taken into careful consideration.
Dr PG Strauss, the managing director of the VKB Group, expressed his excitement about the positive impact the combined group will have on South Africans. He said, “It’s important that the respective businesses and brands within the combined group are positioned and grouped correctly to ensure that clients in all areas receive optimal service.”
Driving the process forward together
“The focus will now be on prudent management of the integration process while continuing to deliver results across the group in terms of customer service, quality products, and financial achievement. The respective management teams of VKB and GWK can now drive the integration process forward – together – and communicate with our shareholders, clients, employees, and other stakeholders to keep them abreast of progress and updated throughout.”
Llewellyn Brooks, the managing director of the GWK Group, emphasised the creation of a unique, diversified, and sustainable producer-owned agricultural group resulting from the merger.
He said, “I look forward to what we can start building now, as well as the opportunities the future holds for our clients, employees, and other stakeholders. The combined group has a large footprint that will unlock efficiencies in terms of, among others, business models and infrastructure.”
‘Agribusiness of the future’
Koos Janse van Rensburg, former managing director of the VKB Group, played a pivotal role in designing the transaction and expressed his satisfaction and anticipation as the intended merger becomes a reality. He said, “I can look back with satisfaction and look forward to the future with anticipation because I am convinced of the combined group’s potential. We want to be a strategic partner to farmers, one that – in our capacity as an agribusiness – can ensure that farmers can sustainably manage their farming businesses.”
Coenraad Fick, the chairman of the VKB Group’s board of directors, highlighted the shared cultures, history, and producer-owned nature of the two companies. “With a shared vision for the future, the combined group will be even more sustainable, will unlock more value, and will establish itself as the agribusiness of the future,” he said.
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