Conditions set as Sibanye obtains approval for R5bn Lonmin takeover
JOHANNESBURG - The Competition Commission has recommended to the Competition Tribunal that the R5 billion merger of Sibanye-Stillwater and Lonmin Plc be approved subject to conditions as it may result in a substantial negative impact on employment given that more than 3,000 employees are likely to be retrenched.
In order to mitigate the impact of such retrenchments, the commission imposed a condition that Sibanye embark on three short term mining projects which are earmarked to avoid retrenchments.
"The employment savings on two of these three projects are likely to materialize in the event that platinum prices increase in future and mining costs are maintained at certain levels," the commission said.
"In addition, Sibanye is required to implement an Agri-Industrial Community Development Programme in the Rustenburg area in the event that a feasibility study permits for such a programme to be implemented in the area."
The commission said these conditions do not absolve Sibanye and Lonmin from any obligations contemplated in any applicable statute relating to retrenchments, including the Labour Relations Act and the Mineral and Petroleum Resources Development Act to the extent required, in the event that any retrenchments are effected post-merger.
The commission also said that the proposed transaction raises significant public interest concerns relating to the negative impact of the merger on employment, procurement from historically disadvantaged persons, existing arrangements with the black economic empowerment Bapo ba Mogale Community as well as adherence to social and labour plans.
But the commission did say that the proposed transaction was unlikely to exert market power in any of the platinum groups metals markets affected by the merger as both merging parties have relatively low market shares in these international markets.
In December 2017, Sibanye offered R5.17 billion for the entire Lonmin share offer, in a deal that would create the world’s second largest platinum producer.
- African News Agency (ANA)