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South African Regulator Approves Unilever’s Acquisition of Dermalogica

By  |  August 30, 2023
The increasing significance of public interest considerations in the South African merger control context

Unilever-controlled Marga is set to make a major corporate changeover after the Competition Commission of South Africa gives them the green light to acquire popular skincare company Dermalogica, helping Unilever South Africa to further extend their business reach. Dermalogica SA, the primary target firm, is wholly owned and controlled by The Dermal Institute of South Africa (DISA). Marga supplies skincare products through Dermalogica SA.

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    The merging parties have agreed to a set of conditions, to ensure the public interest is being taken into consideration. “The merging parties have agreed to a set of conditions that will address public interest concerns, including that the Target Firm shall provide education and training programs to tertiary students and qualified skincare therapists for a period of two years following the implementation date. The Target Firm shall also spend a set amount annually on marketing and design services procured from SMMEs and HDP-owned or controlled businesses. Finally, the merging parties will set up an entrepreneurial support program aimed at supporting salons in the Target Firm’s value chain. All of these conditions will give preference to businesses owned and controlled by Historically Disadvantaged People (HDPs) who are women and youth,” the Commission said.

    Read more: US Big Pharma Must Face Dermatology Antitrust Case

    The Competition Commission had stated that the proposed transaction was unlikely to result in substantial prevention or lessening of competition in any relevant markets. This is great news for these corporations as they look to expand their reach, as well as for those who will now receive training and aid to further their business aspirations. Unilever South Africa will now also have a greater presence in the skincare industry.

    The conditions imposed by the authority are important steps for these corporations, as “Competition authorities have a role to play in ensuring that mergers and acquisitions do not weaken competition in the markets concerned. Mergers that are beneficial to the public interest and that can achieve meaningful economic transformation should be encouraged”.

    The merger between the two companies will therefore provide a wealth of benefits, from educational and training services for approved HDPs to the additional possibility of increased employment due to the merger.

    Source: IOL CO