South African industrial group KAP, a diversified industrial group based in Stellenbosch and Johannesburg, has revised the structure of a proposed transaction combining the Southern Cape forestry and sawmilling operations of its subsidiary PG Bison with the MTO Cape Business, after key conditions of the original deal were not completed.

KAP, which owns PG Bison, announced the revised transaction structure on August 19, 2026, following the signing of amended transaction agreements involving PG Bison Southern Cape, MTO Forestry and Cape Forest Products.

The transaction was initially announced in October 2025 and was designed to combine PG Bison’s non-core forestry, sawmilling and pole operations in the Southern Cape with MTO Forestry’s Southern and Eastern Cape forestry and sawmilling businesses.

Transaction structure changes

Under the original transaction, South African Forestry Company SOC, known as Safcol, was expected to transfer its shares in MTO Forestry to MTO Community SPV, a ring-fenced vehicle established to hold shares in Cape Forest Products. The shares in MTO Community SPV were intended to be held by a community trust to be established by Safcol.

However, Safcol has not transferred its MTO Forestry shares to MTO Community SPV, while MTO Forestry has also been unable to complete the planned sale of certain excluded assets and operations. Despite these outstanding conditions, the parties have agreed to proceed with the transaction under a revised structure.

PG Bison Southern Cape to be sold to CPIH

Under the amended transaction steps, MTO Forestry will warehouse the excluded assets in an indirect subsidiary before the implementation of the PG Bison Southern Cape disposal.

Safcol will retain an 11.32% minority stake in MTO Forestry pending the establishment of the community trust. At the same time, PG Bison Southern Cape’s equity will be sold to Cape Pine Investment Holdings, or CPIH. Once the revised transaction is implemented, PG Bison Southern Cape will become a wholly owned subsidiary of CPIH, while CPIH will hold an 88.68% stake in MTO Forestry.

CPIH will itself be wholly owned by Cape Forest Products. The issued share capital of Cape Forest Products will be divided between PG Bison, which will hold 49%, and Wild Peach Investment Holdings, which will own the remaining 51%.

Competition approval already secured

KAP, a diversified industrial group operating in southern and East Africa, with leading industry positions in the wood-based panel, automotive components, bedding, polymers, logistics and passenger transport sectors.

The original transaction received approval from South African competition authorities on May 4, 2026, under the Competition Act. Following the changes to the transaction structure, the relevant parties notified the competition authorities of the amendments contained in the revised agreements. The revised transaction agreements were signed on August 19, 2026, with KAP anticipating an effective date of October 1, 2026.

The restructuring allows the parties to continue pursuing the combination of the Southern Cape forestry and sawmilling businesses despite the failure to complete key elements of the original transaction structure, while preserving Safcol’s minority interest pending the establishment of the community trust.