The Competition Tribunal has approved the merger between health club chain Virgin Active South Africa and healthy eating fast-food chain, Kauai.
The merger includes Kauai Juice, Kauai Smart Meals, and Nu Health Cafe. In terms of the proposed transaction, Virgin Active will acquire the companies from Real Foods.
“The Tribunal has concluded that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market in South Africa. Furthermore, the proposed transaction raises no public interest concerns,” it said.
The Virgin Active Group operates health clubs, offering a range of fitness and wellness services through the Virgin Active brand. The target firms provide a healthy food and beverage offering through medium and large retail stores, as well as inside Virgin Active clubs.
In its latest financial results, Virgin Active South Africa owner, Brait, said the health clubs in South Africa are showing good traction on membership recovery following a lift in Covid restrictions around capacity, in line with lockdown regulations in February of 2022.
Since the relaxation of Coronavirus restrictions and the removal of capacity restraints in Q1 2022, Virgin Active South Africa said its sales have recovered to levels similar to 2019 levels with active members growing from 497,000 at the end of December 2021 to 557,000 in May.
Membership engagement and usage levels continue to improve and termination levels have fallen, comparing favourably to 2019 levels, said holding company Brait in announcing financial results for the year ended March 2022.
Virgin, which represents 44% of Brait’s total assets, has undergone a significant year completing its restructuring plan and debt refinancings, raising R1.8 billion of new capital in the group.
In June, Virgin Active South Africa appointed Jessica Spira as its new managing director effective from 1 October 2022.
Along with the Kauai acquisition, the group said it will expand its predominantly bricks & mortar offering into digital, and will also invest in the member experience. It will also implement a flexible pricing model, although details of this are yet to be released.