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Northam granted limited rights to intervene in Implats-RBPlat merger hearing

In a statement, the Tribunal has said Northam’s participation in the merger proceedings will be limited to making written and oral submissions on two potential theories of harm. Picture, Pixabay.

In a statement, the Tribunal has said Northam’s participation in the merger proceedings will be limited to making written and oral submissions on two potential theories of harm. Picture, Pixabay.

Published Jun 24, 2022

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The Competition Tribunal yesterday said that it had granted Northam Platinum the limited right to participate in the merger proceedings involving Impala Platinum (Implats) and Royal Bafokeng Platinum (RBPlat).

This as Northam tries to fend off a takeover by its rival Implats of RBPlat. Northam has since grown its RBPlat stake to roughly 35 percent.

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In a statement, the Tribunal said Northam’s participation in the merger proceedings would be limited to making written and oral submissions on two potential theories of harm.

The first theory was the vertical effects of the proposed merger, including the effect on competition in the local upstream market for the production and sale of primary concentrate.

The second was the extent to which the merger effects could be prejudicial to junior miners in South Africa.

“In terms of the Tribunal’s order, Northam's independent legal representatives and economic advisers are granted access to the confidential version of the Commission’s merger recommendations, subject to certain confidentiality undertakings,” the Tribunal said.

Implats spokesperson Johan Theron said the company welcomed the decision made by the Tribunal as Northam was granted limited rights.

“They were granted rights to two issues, which they were only given two weeks to submit, we obviously welcome that,” he said.

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Business Report could not reach Northam and RBPlats for comment.

This follows Northam Platinum launching an application to the Tribunal to intervene in the approval process for Implat’s acquisition of its stake.

During the Tribunal arguments, Northam said the Tribunal should be concerned when the most promising junior exited the market raising the issue of competition. There would be a permanent structural change to the relevant markets that this transaction would bring about, it alleged.

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Both Implats and RBPlat opposed Northam’s intervention application, which the Tribunal heard earlier this month.

Implats has defended the merger, saying its share of the market will only increase from 17 percent to 20 percent after the takeover is concluded. It has said this three percentage point increase is too small to change the structure of the market.

The Competition Commission, which investigates large mergers before referring such to the Tribunal for a decision, has recommended to the Tribunal that the proposed merger be approved with conditions and is abiding by the Tribunal’s decision in respect of the intervention application.

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The Commission has said it will abide by the tribunal’s decision in respect of the intervention application.

In November, Northam announced that it had made a strategic investment by acquiring a significant shareholding in RBPlat. It acquired 34.65 percent, and a bidding war ensued with Implats, which offered to buy out all RBPlat shareholders and, to date, had acquired 37.83 percent of the shares.

The merger hearing date has not been set yet.

BUSINESS REPORT

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