Commission opposes Aton's acquisition of Murray & Roberts
M&R’s share price fell by as much as 17.45 percent to R11.40 on Friday, before closing at R11.80.
The commission, in giving reasons for its decision, said that Aton controls a number of firms including Remgro-Capevin Investments, Financial Securities, Unilever South Africa Holdings and others.
In South Africa, the Aton Group through Redpath SA provides a range of mining services to sub-Saharan Africa, including the excavation of vertical or inclined openings from the surface for conveyance of miners, materials, ventilation, pumping water, in addition to hoisting ore and waste rock, operational or maintenance activities, infrastructure development and upgrading, and whole mine operational management.
M&R focuses on project engineering, procurement, construction, commissioning, operations and maintenance solutions. It puts its capabilities into three global sectors: oil and gas, underground mining and power and water.
The commission found that the merging parties were close competitors and that this transaction would, for both parties, result in the removal of their closest and strongest competitor.
During its investigation, the commission said it had received expressions of concern that the deal would potentially negatively impact competitors. The concerns were that the merger will potentially create a company that had such size and scale, it would have the financial wherewithal to throttle competition.