Sibanye gets regulatory nod for $294m Aquarius bid

Harare – The Competition Commission and the Commission Tribunal have given the nod to Sibanye Gold's [JSE:SGL] acquisition bid for Aquarius Platinum [JSE:AQP], which has operations in South Africa and runs a joint venture unit with Impala Platinum [JSE:IMP] in Zimbabwe.
 
The regulatory approval paves the way for the two companies to finalise the deal. Sibanye Gold is seeking diversification into platinum at a time when investor analysts are less bullish about the near term prospects of the precious metal.
 
Analysts at FocusEconomics on Wednesday cited labour conditions and collective bargaining in South Africa as contributing to price movements for platinum. Gold has also firmed up in the past few months, as investors seek safe haven assets in the light of economic and currency weakness in most major global markets.
 
Currency movements, interest rates, the state of the global economy as well as developments in major consumer countries such as the USA, Europe, Japan and China have also been cited as major push or pull factors in platinum prices.
 
A panel of analysts surveyed by FocusEconomics for its March commodity consensus reports seeing prices "averaging $978 per troy ounce" in the fourth quarter of 2016, rising to $1 070/oz in the fourth quarter of 2017.
 
Aquarius Platinum said in a statement on Thursday that its "proposed transaction with Sibanye Gold has been approved by the South African Competition Commission and the Commission Tribunal”.
 
The green light from the two institutions was the final regulatory approval required for the transaction, which had already received the nod from shareholders in both companies in January. Sibanye last year tabled a $294m bid for Aquarius Platinum.
 
“Aquarius and Sibanye are now in the process of confirming the Conditions Fulfilment Date,” said Aquarius Platinum, adding that further announcements will be made in due course on transaction and payment terms to its shareholders.
 
Combined production from Aquarius Platinum’s Kroondal and Mimosa mines for the half-year period to December amounted to 352 107 platinum group metal ounces. Production from Mimosa was 2% higher while costs were 2% down, although the Zimbabwean mine had one fatality and four lost time injuries.
 
Sibanye Gold is optimistic about the future prospect of platinum prices, although it has been criticised for being over-ambitious in a market in which it has no experience. Aquarius Platinum’s joint venture in Zimbabwe is said to be finalising a feasibility study.
 
“The price of platinum still remains at low levels largely due to lacklustre global demand and poor economic data from China. In addition, expectations of abundant supply continue to contribute to the low prices,” FocusEconomics analysts said.