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Sibanye-Lonmin deal gets a boost from competition watchdog

Sep 18 2018 13:52
Sibongile Khumalo

The R5bn Sibanye-Stillwater [JSE:SGL] acquisition of Lonmin [JSE:LON] has received a boost from competition authorities.

The Competition Commission has recommended to the Tribunal that the acquisition be approved, subject to agreed conditions.

Sibanye said the commission found that the proposed takeover of the world’s third-largest platinum miner was "unlikely to substantially prevent or lessen competition in any of the markets affected by the proposed merger".

The deal would give Sibanye much-needed access to Lonmin’s concentrators, smelters and refineries, entrenching the company’s position in the platinum group metals sector.

The chief executives for both companies welcomed the commission’s decision.

READ: Ben Magara: 12 600 Lonmin jobs depend on Sibanye deal

"We are confident that this transaction will not only bring greater stability to these assets and ensure a more sustainable and positive future, but also demonstrate Sibanye-Stillwater’s commitment to the South African mining sector," said Sibanye CEO Neal Froneman.

The conditions of the deal require the companies to mitigate the impact of retrenchments, and for Sibanye to honour Lonmin’s current and future social and labour plans and continue to support transformation in the mining industry.

Lonmin attracted global attention in 2013, when police shot 34 striking mineworkers at the firm’s Marikana operations.

The company has also been shedding jobs in recent years, and CEO Ben Magara early this year warned that the struggling firm was set to retrench about 12 600 workers between 2018 and 2020, if the Lonmin deal was not finalised soon.

In May, the deal cracked the nod from the South African Reserve Bank. The deal remains subject to approval from the competition authorities of the United Kingdom, where Lonmin is headquartered. 

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lonmin  |  sibanye  |  mining
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