The operational implementation of the merger between Senwesbel Ltd (Senwesbel), its subsidiary, Senwes Ltd (Senwes) and Suidwes Holdings commenced on 12 October 2020.
The primary acquiring firms are Senwesbel and its subsidiary, Senwes. Having serviced the agricultural sector since 1909, Senwes is one of the largest agricultural businesses in South Africa. Suidwes, a 111-year-old agricultural company, is a private company with farmers holding most of the shares in Suidwes.
The offer to the Suidwes shareholders is currently in the implementation phase. Following the implementation phase, Senwes will be the sole shareholder of Suidwes. Since the transaction’s approval in August 2020, all the companies involved have done much planning regarding the merger and the structuring of the different operational businesses.
“When two businesses merge, it inevitably results in tension, change and adjustment. The more common areas of tension relate to personnel and clients,” said Francois Strydom, chief executive officer of Senwes.
Focussing on synergy and cost reduction
One of the logical consequences of a merger between companies in geographically bordering areas is to focus on cost reduction and the utilisation of synergies. Such processes cause uncertainty for the personnel of both companies since the principle of best of both is applied.
Customers traditionally also do not like familiar processes to change, but it is part of the dynamics of mergers and typical in the restructuring of the value chain. This process has been ongoing for the past two to three years. According to Senwes, COVID-19 and the shrinking of the financial sector accelerated this process.
Personnel restructuring and customer experience
The personnel restructuring process is nearing completion. In addition, the processes that will influence customer experience will be executed and stabilised over the next few months. “For us it is business as usual. However, certain aspects will inevitably not run as smoothly as one would hope for,” Francois added.
The understanding and patience of all parties involved during this process will be highly appreciated. This is something which Senwes has gone through several times. As in the past, Senwes is confident that initial scepticism will soon change to better service delivery.
Stakeholders will receive more information in due course. Senwes also thanks all its clients and suppliers for their continued and loyal support. – Press release, Senwes Group