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[2014] ZACT 25
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Sibanye Gold Limited v Witwatersrand Consolidated Gold Resources Ltd (018366) [2014] ZACT 25 (26 February 2014)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: 018366
In
the matter between:
SIBANYE
GOLD
LIMITED
Primary Acquiring Firm
And
WITWATERSRAND
CONSOLIDATED GOLD
RESOURCES
LIMITED
Primary Target Firm
Panel
Anton Roskam (Presiding Member)
Medi
Mokuena (Tribunal Member)
Merle
Holden (Tribunal Member)
Heard
on Order
12 February 2014
Issued
on
12 February 2014
Reasons
Issued on
26 February 2014
Reasons
for Decision
Approval
[1]
On 12 February 2014, the Competition
Tribunal (“Tribunal”) unconditionally approved the
acquisition by Sibanye Gold
Limited of Witwatersrand Consolidated
Gold Resources Limited as a going concern.
Parties
to transaction
[3]
The
primary acquiring firm is Sibanye Gold Limited (“Sibanye”).
Sibanye is a public company listed on the Johannesburg
Stock Exchange
(JSE) with a secondary listing of its American depositary receipts on
the New York Stock Exchange. Sibanye was previously
known as GFI
Mining South Africa (Pty) Ltd (“GFIMSA”) and was
incorporated and registered as a private company in South
Africa in
December 2002. Prior to GFIMSA’s incorporation, the operations
which now constitute Sibanye Gold were owned by
Gold Fields Limited
(“Goldfields”). The mining assets now referred to as the
Sibanye Gold assets were unbundled from
Gold Fields. Sibanye Gold was
thereafter converted from a private to a public company and listed on
11 February 2013 and is not
controlled by any single entity.
[1]
[4]
The
primary target firm is Witwatersrand Consolidated Gold Resources
Limited (“Wits Gold”). Wits Gold has a primary
listing on
the JSE, a secondary listing on the Toronto Stock Exchange, and a
level 1 ADR program backed by the Bank of New York
Mellon. Wits Gold
is not controlled by any single shareholder.
[2]
Wits Gold however controls K2013164354 (Pty) Ltd.
Proposed
Transaction
[5]
In terms of the proposed transaction
Sibanye Gold will acquire 100% of the issued share capital of Wits
Gold. The intention is for
this transaction to proceed by way of a
scheme of arrangement, which Sibanye will propose to the board of
directors of Wits Gold,
which will in turn propose to the
shareholders of Wits Gold for a decision.
Primary
acquiring firm
[6]
The primary acquiring firm seeks to
acquire funds for a further transaction and to deliver returns to its
shareholders in order
to secure and strengthen the future of its core
operations, seeking growth opportunities and securing the future of
its Beatrix
operations.
Rationale
Primary
target firm
[7]
The transaction will provide
shareholders with the opportunity to receive cash considerations for
100% of their holding in Wits
Gold, which will allow it to focus on
its new objective of becoming a gold producer and take its focus away
from early stage mining
operations.
Relevant
Market and Impact on Competition
[8]
The
relevant market is the market for the international production and
supply of gold and silver. In line with our previous decisions
involving the production and supply of gold and silver we find these
markets to be international in scope because all South African
Gold
is sold to the international bullion banks and the Rand Refinery acts
as an agent for most of the South African gold producers
in the
process.
[3]
[9]
There
is a horizontal overlap in the activities of the merging parties
based on the potential overlap in the production and supply
of gold
and silver. We find that the proposed transaction is unlikely to
substantially prevent or lesson competition given the
merged entities
minimal market share of less than 2% in respect of the production and
supply of gold and 1% in respect of the production
and supply of
silver
[4]
Conclusion
[10]
In light of the above we agree with the
Commission's conclusion that the proposed transactions are unlikely
to substantially prevent
or lessen competition in the international
market for the production and supply of gold and silver. In addition,
no public interest
issues arise from the proposed transaction.
Accordingly, we approve the proposed transaction unconditionally.
26
February 2014
DATE
Anton
KosKam
Medi
Mokuena and Merle Holden concurring
Tribunal
Researcher: Derrick Bowles
For
the merging parties: HB Senekel and Darren Smith - ENS
For
the Commission: Lindiwe Khumalo
[1]
See list of largest shareholders on page 6 of the Commission’s
Report.
[2]
See
list of largest shareholders on page 8 of the Commission’s
Report.
[3]
See Harmony Gold Mining Company Ltd and Pamodzi Gold Free State
(Pty) Ltd, 71/LM/Oct09.
[4]
See Table 1 and Table 2 on pages 14-16 of the Commission’s
Report.