COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No:84/LM/SEP11
In the matter between:
ANGLOGOLD ASHANTI LIMITED Acquiring Firm
And
FIRST URANIUM CORPORATION Target Firm
Panel : Norman Manoim (Presiding Member)
Merle Holden (Tribunal Member)
Medi Mokuena (Tribunal Member)
Heard on : 29 November 2011
Order issued on : 29 November 2011
Reasons issued on : 08 December 2011
Reasons for Decision
Approval
1] On 29 November 2011, the Competition Tribunal (“Tribunal”) approved the
large merger between AngloGold Ashanti Limited and First Uranium
Corporation. We explain below our reasons for this conclusion.
The Parties to the transaction
2] The primary acquiring firm is AngloGold Ashanti Limited (“AGA”) a company
incorporated in accordance with the laws of the Republic of South Africa.
AGA is a widely held company that is not controlled by any firm.
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3] The primary target firm is First Uranium Corporation (“FIUC”), a company
listed on the Johannesburg Securities Exchange and not controlled by any
single entity. However, its largest shareholders are Village Main Reef Limited
and Franco-Nevada GWL Holding Corporation.
4] In terms of the transaction, AGA will acquire sole control over FIUC through
the purchase of shares equating to approximately 19.79% interest in FIUC
from Village Main Reef Limited in the long term.
The Rationale
5] The merging parties submitted that the acquisition of FIUC is expected to
increase AGA’s annual U 3O8 production and provide steady-state, long term
additional gold production.
The parties’ activities
6] AGA is a mining company with a number of operations worldwide which are
supported by exploration activities that comprise of both greenfields and
brownfields exploration.1 It has surface and underground mining operations in
South Africa, as well as other African countries, the Australasia region, the
United States and South America.
7] AGA’s South African operations comprise six deep level gold mines and one
surface gold operation.
8] FIUC is a Canadian resources company involved in the development and
operation of gold and uranium projects in South Africa.
The relevant market and the impact on competition
9] The Commission found that there is an overlap in the activities of the merging
parties in the market for the production and supply of gold and the market for the
production and supply of uranium, as both AGA and FIUC produce and supply
gold and uranium. The Commission also submitted that the relevant geographic
1 Exploration is termed either greenfields or brownfields depending on the extent to which previous
exploration has been conducted on the tenements in question. “Greenfields” refers to unspoilt field
whilst “brownfields” refers to that which has been trodden on repeatedly. See page 8 of the
Commission’s report.
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market is global as there are substantial global trade flows and the product is
priced on a global basis. However, with a post-merger market share of 5.078%
and 1.017% in the markets for the production and supply of gold and uranium
respectively, the Commission submitted that the transaction.
CONCLUSION
10] The parties submitted that the proposed transaction will not result in employment
losses. The proposed transaction does not raise any other public interest issues.
11] We agree with the Commission’s conclusion above and find that the merger is
unlikely to lead to any substantial prevention or lessening of competition in the
relevant markets. Accordingly, we approve the above merger unconditionally.
____________________ 08 December 2011
NORMAN MANOIM DATE
Medi Mokuena and Merle Holden
Tribunal Researcher: Tebogo Hlafane
For the merging parties: Edward Nathan Sonnenbergs Attorneys
For the Commission: Bheki Masilela
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