Sibanye-Stillwater has agreed to buy Lonmin in an all-share deal.
In reaction, Lonmin shares jumped 7.2percent to R13.40 on the JSE.
“Doubtless welcome news to long suffering Lonmin shareholders averting the need to dig into their pockets once again to refinance the company in its regular three to four year refinancing cycle,” said Marc Elliott, analyst at Investec bank.
However, Sibanye dropped 7.08percent to R14.97 as investors fretted about the dilutive impact of the deal and the quality of assets Sibanye is adding to its portfolio.
Overall, investors took their cue from an upbeat tone in other emerging markets after the US Federal Reserve delivered a widely expected rate increase.
The benchmark JSE Top40 index added 0.68percent to 51498.36 points and the broader all share index gained 0.87percent to 57845.57 points.
In foreign exchange, the rand was firmer ahead of this weekend’s ANC conference to elect a new leader.
At 5pm, the rand bid at R13.4536 to the dollar, 8.27c firmer than at the same time on Wednesday.
In fixed income, the yield for the benchmark government bond due in 2026 was down 3 basis points to 9.215percent.
Meanwhile, US stocks climbed higher in afternoon trade, boosted by gains in technology and banking shares and aided by news that the Republicans’ tax code overhaul should face final votes in Congress before the year-end.
A final bill could be formally unveiled on Friday, with decisive votes expected next week in both chambers.
On Wednesday, Republicans in the Senate and the House reached a deal on final tax legislation that would slash the corporate tax rate to 21percent.
At 4.40pm, the Dow Jones industrial average had gained 0.29percent to 24655.57 points, on track to post six days of gains in a row.
The Standard & Poor’s 500 was up 3.14 points, or 0.12percent, at 2665.99 points and the Nasdaq Composite was up 9.26 points, or 0.13percent, at 6885.06 points.