The South African Competition Commission has recommended that the South African Competition Tribunal approves the proposed acquisition of Lonmin by Sibanye-Stillwater, subject to certain conditions, which are agreeable to both Sibanye-Stillwater and the Commission.
The Tribunal is the regulatory body which provides final approval for large mergers in South Africa.
Despite the Commission noting a vertical and horizontal overlap of Sibanye-Stillwater and Lonmin’s activities in the PGM industry, the Commission found that the proposed merger is unlikely to substantially prevent or lessen competition in any of the markets affected by the proposed merger.
Certain conditions pertaining to public interest concerns related to the merger, agreed to between the Commission and Sibanye-Stillwater, are consistent with Sibanye-Stillwater’s approach to stakeholder engagement and its vision of “delivering superior value to all stakeholders”.
These conditions include:
- To mitigate the potential impact of retrenchments, Sibanye-Stillwater will investigate and implement certain mining projects, subject to the economic viability of the projects being supported by prevailing future metal prices and enhanced operating costs achieved through the realisation of expected synergies.
- In further mitigation of the potential impact of job losses in the region, Sibanye-Stillwater has also committed to investigate the feasibility of an agri-industrial community development programme in the Rustenburg area similar to the Bokamoso Barona initiative, a public-private partnership on the West Rand, which was announced on Friday 7 September 2018.
- In addition, Sibanye-Stillwater will honour Lonmin’s current and future social and labour plans as agreed with the Department of Mineral Resources, as well as the agreements currently in place with the Bapo ba Mogale community.
- Finally, the company continues to support transformation in the mining industry, including the development of historically disadvantaged persons (HDP). In this regard Sibanye-Stillwater will both honour existing contracted HDP suppliers to Lonmin and endeavour to continue to utilise HDP suppliers, on reasonable commercial terms, in line with the company’s existing procurement policies.
“The positive recommendation by the Commission to the Tribunal is pleasing and on terms which we believe are fair, reasonable and in the best interest of all stakeholders,” says Sibanye-Stillwater CEO Neal Froneman.
“We are confident that this transaction will not only bring greater stability to these assets and ensure a more sustainable and positive future, but also demonstrate Sibanye-Stillwater’s commitment to the South African mining sector,” he adds.
Ben Magara, CEO of Lonmin says that Lonmin is pleased that the parties have reached the agreed conditions and that its transformation journey will continue.
The takeover offer remains subject to the satisfaction or (where applicable) waiver of the outstanding conditions of the offer by Lonmin and Sibanye-Stillwater on 14 December 2017. Such conditions include, amongst others, the approval of the offer by the Tribunal and the approvals of Lonmin and Sibanye-Stillwater shareholders and the courts of England and Wales.
Both Sibanye-Stillwater and Lonmin remain fully committed to the offer.